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Dynamic Fee Based on Trading Volume

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Overview

The Dynamic Fee Plugin Based on Trading Volume allows DEXes to dynamically adjust trading fees based on a user's trading volume. By integrating this plugin, DEXes can enhance user retention and attract new users through VIP programs that offer fee discounts. This functionality ensures long-term loyalty and increases protocol revenue. The plugin leverages the Brevis ZK coprocessor to access and decode historical on-chain data, enabling efficient and trust-free operations.

Key Features

  • BeforeSwap Plugin: Users can check VIP tier eligibility based on past trading volume before swapping.
  • Brevis ZK Coprocessor Integration: Accesses and decodes historical on-chain data, performs customizable computations, and verifies results.
  • Cost-Efficient: Involves a single transaction from the user, minimizing costs.
  • Trust-Free Architecture: Supports decentralized, trust-free operations for VIP programs.

Benefits

For Users

  • Fee Discounts: Enjoy reduced swap fees based on trading volume.
  • VIP Programs: Gain access to exclusive VIP tiers and benefits.

For DEXes

  • Retention: Implement loyalty programs to retain traders and bolster liquidity.
  • Revenue: Increase revenue by incentivizing higher trading volumes.
  • Customization: Create customized fee structures without changing the core code.

For Developers

  • Modular Integration: Easily integrate new functionalities with the core AMM.

Implementation

  • Integration with Liquidity Pools The Dynamic Fees Based on Trading Volume Plugin is designed to seamlessly integrate with liquidity pools within decentralized exchanges (DEXes), powered by Algebra Integral.

Use Cases

For Decentralized Exchanges

  • VIP Programs: Implement VIP trader loyalty programs similar to those in centralized exchanges.
  • Custom Fee Structures: Offer variable fee structures based on user trading volume.
  • Efficient Data Processing: Utilize Brevis to handle historical data and perform computations off-chain for efficiency and cost savings.

Conclusion

The Dynamic Fee Plugin Based on Trading Volume empowers DEXes to implement sophisticated fee structures that reward active traders, boosting retention and attracting new users. By leveraging Brevis' advanced technology, this plugin ensures efficient, cost-effective, and trust-free VIP programs, paving the way for a more engaging and profitable DeFi ecosystem.

About Algebra Integral

Until now, each DEX had its source code in the form of a single immutable monolith, and updating such architecture required liquidity migration and associated additional expenses.

With the advent of Integral, it became possible to separate the most vulnerable part (liquidity storage) and peripheral functionality modules (e.g. oracles, fee calculation) from each other. Critical functionality of liquidity storage and swap calculations is kept at the unchangeable Core, while peripheral functionality performs as Plugins and can be updated when needed without liquidity migration. This approach allows DEXes to develop faster.

Plugins can be introduced by DEXes themselves or external developers encouraged by the fees to create new Plugins and push the technology forward according to DeFi current trends.