XEI Docs
  • 👋Welcome to XEI
  • Feature Description
    • 💫Swap Trading
    • ✨Leverage Trading
    • 💰Liquidity Pools
    • 🎭Lending Pools
    • 💵Liquidation
    • 💹Oracle
  • PRODUCT GUIDES
    • 📒Tutorial
      • Getting Started on XEI
      • How to Start a Market Swap
      • How to Add Trading Tokens
      • How to Start Futures Trading
      • How to Add Liquidity
    • ❓FAQ
      • What should I do if I can't find the cryptocurrency I want to trade?
      • What are market orders and limit orders?
      • What fees are associated with Swap transactions?
      • What are fee tiers, and how do you choose the right fee tier?
      • What happens if the current price exceeds the price range set for my liquidity position?
      • Are fee rewards automatically compounded?
      • What factors affect LP APR?
      • What is Lending Pools?
      • How is the reward period calculated after participating in Lending Pool?
      • Which cryptocurrencies are supported by Lending Pool?
      • How long does it take for redemption to be credited to the account?
  • OTHER
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  1. PRODUCT GUIDES
  2. FAQ

What are fee tiers, and how do you choose the right fee tier?

When you provide liquidity, you can select from several different trading fees (0.01%, 0.05%, 0.3%, and 0.1%) for the same token pair.

For example, for SEI-USDT, there is a 0.25% fee tier, which means that a 0.25% trading fee is charged for each transaction. However, some liquidity providers may choose to provide liquidity for the SEI-USDT trading pair at a 0.05% rate to offer better quotes and attract more trading volume.

There is no "correct" answer for which trading fee tier to choose. It depends on the tokens within the trading pair. Generally, tokens with high volatility should have higher trading fees to better compensate for the impermanent loss caused by the volatility. On the other hand, tokens like stablecoins, which have smaller price fluctuations and lower impermanent loss, should have lower trading fees.

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Last updated 11 months ago

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