Understanding STON.fi Swap Fees: Breakdown of Costs and Benefits
STON.fi is a popular decentralized exchange (DEX) built on the TON blockchain. It allows users to seamlessly swap cryptocurrencies without relying on a central authority. But like any marketplace, there are fees involved to ensure smooth operation and incentivize participation. This article dives into the concept of swap fees on STON.fi, explaining what they are, where they go, and how they benefit you.
🎯Behind the Swap: Liquidity Pools
When you swap tokens on STON.fi, you’re not directly exchanging them with another user. Instead, you interact with liquidity pools. These pools are essentially collections of tokens locked by users called liquidity providers (LPs). These LPs contribute equal parts of two tokens, creating a market for easy swapping.
🔰Understanding the Fee Breakdown
There are three (3) main factors to consider when it comes to swap fees on STON.fi:
- Price Impact: This occurs when your swap alters the price of the tokens within the pool slightly. Deeper pools with more tokens experience less price impact, leading to a more favorable exchange rate for you.
- Slippage: While the quoted price might seem enticing, the actual price you receive can differ slightly due to market fluctuations during the swap processing. Setting a higher slippage tolerance allows for a faster trade but might lead to a slightly less favorable exchange rate.
- Trading Fee: This is a flat fee of 0.3% charged on every swap within a basic Constant Product Pool on STON.fi. But here’s the interesting part: this fee isn’t solely collected by the platform.
❓Where Do the Fees Go?
The 0.3% trading fee is cleverly distributed to incentivize a healthy ecosystem:
- 0.2% to Liquidity Providers: This portion directly rewards users who contribute to liquidity pools. By increasing the size of the pools, they ensure smoother swaps and minimize price impact for everyone. This incentive encourages more users to become LPs, which benefits all swappers in the long run.
- 0.1% to STON.fi Protocol: The remaining 0.1% goes towards maintaining and developing the STON.fi platform. This fee ensures the DEX operates securely and efficiently, with ongoing updates and improvements to enhance the user experience.
In Summary: Fees for a Functioning Ecosystem
Swap fees on STON.fi may seem like a small cost, but they play a crucial role in the DEX’s functionality. They incentivize liquidity providers, ensuring deeper pools and smoother swaps for everyone. Additionally, they contribute to the ongoing development of the STON.fi platform, keeping it secure and reliable. So, the next time you swap tokens on STON.fi, remember — these fees are a small investment in a thriving decentralized exchange environment.
For a deeper dive into STON.fi’s features and the latest updates, head over to their insightful blog, where you can also find interesting articles like “Is It Too Late to Buy Notcoin?”
✅ABOUT STON.FI
STON.fi is an AMM DEX for the TON blockchain!
STON.fi is a decentralized automated market maker (AMM) built on the TON blockchain providing virtually zero fees, low slippage, an extremely easy interface, and direct integration with TON wallets.
