⚖️(V2.1)Weighted pool fees - Dynamic

Weighted Pools offer a dynamic fee structure. This means, whoever sets up the pool decides upon the fee.

Weighted pools will fall under a variable fee structure, whoever sets up the pool can determine the overall fee. For example if Reaper set up their own weighted pool, they could set the fee on this pool at 1% if they desired.

Any pools created by SpiritSwap will fall under our vAMM fee structure of 0.18% to keep swap fees as consistent as possible.

Fee distribution (based on 0.18% fee)

Terminology Key:

LP (Liquidity pool): This is a percentage of the overall fee that gets allocated to LP providers Weighted Fee: This is a percentage of the fee that gets distributed in accordance with the "weighted pool structure". This fee is distributed in different ways, depending on variable factors.

1/2 of weighted fees will be allocated to the LP (0.09% fee) - This will always be the case no matter what. This is an invariable factor of the fee model.

1/2 of weighted fees will go the following “weighted fee structure” (0.09% fee) Token 1 = 0.045% of the “weighted fee structure” Token 2 = 0.045% fee of the “weighted fee structure”

How the weighted fee structure is then distributed, is dependent on a few factors.

Weighted Fee Factors:

Factor 1: If token 1 &/or 2 is SPIRIT, Non protocol stable (USDC, DAI, fUSDT), FTM, wBTC, wETH or any other Layer 1 e.g AVAX, this would mean a weighted fee allocation as follows; A: 12.5% of the overall fee of (0.18%) would go to Spirit DAO treasury. B: 12.5% of the overall fee of (0.18%) would go to the Spirit maker contract for inSPIRIT distribution. Factor 2: If token 1 & /or 2 is any other token (excluding those mentioned in Factor 1 ), protocols will receive a quarter of the “weighted fee distribution”;

A: 12.5% of the overall fee of (0.18%) would go to would go to our partner project treasury (protocol fee). B: 12.5% of the overall fee of (0.18%) would go to the Spirit maker contract for inSPIRIT distribution.

Examples:

Example 1:

If there was a weighted pool for OATH - FTM LP set at a swap fee of 0.18%, distribution of the fee would be as follows:

LP:

• 50% of the overall fee is going to the LP as this is an invariable factor (it will always happen)

Weighted Fee Structure:

• 25% of the overall fee is going to SpiritMaker as per “weighted fee structure” (factors 1B & 2B)

  • 12.5% of the fee is taken for SpiritMaker from token 2 (FTM factor 1B)

  • 12.5 % is taken for SpiritMaker from token 1 (OATH factor 2B)

• 12.5% of the overall fee is going to Spirit DAO as per "factor 1A" (for FTM side of the LP)

• 12.5% of the of the overall fee is going to reaper as per “factor 2A" (for OATH side of the LP)

Example 2:

If the weighted pool comprised of OATH - LQDR LP (2 protocol tokens), only factor 2 is engaged in this "weighted fee structure" as neither of the tokens in the pair fall under the parameters highlighted in factor 1.

LP:

• 50% of the overall fee is going to the LP as this is an invariable factor (it will always happen).

Weighted Fee Structure:

• 12.5% of the overall fee (0.0225%) go to Reaper protocol as per token 1(OATH)“factor 2 A”

• 12.5% of the overall fee (0.0225%) go to Liquid Driver protocol as per token 2(LQDR)“factor 2 A”

• 25% of the overall fee is going to SpiritMaker as per “weighted fee structure”

  • 12.5 % is taken for SpiritMaker from token 1 (OATH) as per “factor 2 B"

  • 12.5 % is taken for SpiritMaker from token 2 (LQDR) as per “factor 2 B"

Example 3:

If the weighted pool comprises of two protocol based tokens from the same protocol e.g (gSCARAB - SCARAB) from Scarab Finance.

LP:

• 50% of the overall fee (0.09%) would go to the LP would go to the LP as this is an invariable factor (it will always happen).

Weighted Fee Structure:

• 25% of the overall fee (0.045%) would go to Scarab protocol as per "factor 2A" for both tokens (1 & 2)

  • 12.5 % of the overall fee (0.0225%) from token 1 (gSCARAB) as per token 1 factor 2A

  • 12.5% of the overall fee (0.0225%) from token 2 (SCARAB)as per token 2 factor 2A

• 25% of the overall fee (0.045%) would go to SpiritMaker for inSPIRIT distribution as per "factor 2B" for both tokens (1 & 2)

  • 12.5 % is taken for SpiritMaker from token 1 (gSCARAB) as per token 1 factor 2B

  • 12.5% of the fee is taken for SpiritMaker from token 2 (SCARAB) as per token 2 factor 2B

The Weighted fee structure has been constructed in a manner that still employs the positive feedback loop of the vAMM fee model, but aligns closer with the weighted pool contracts from the original balancer infrastructure.