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Earning Fees

Liquidity providers (LPs) can directly receive a portion or all trading fees from Integral pools. LPs can receive these fees in the tokens constituting the pool, such as WETH or USDC in the WETH-USDC LP.

Mechanism

A "fee switch" is implemented to allow LPs to earn a portion of the trading fees. This allocation ranges between 0% and 100%. For instance, at a 50% ratio:
  • Trading fees accumulate in the pool with each transaction.
  • LPs’ deposit or withdrawal actions trigger the distribution of accumulated fees to the smart contract governed by the factory.
  • With the 'fee switch', 50% of these fees revert to the pool, enhancing the value of LP positions. This value increase is reflected in LP token value, not through additional LP token issuance.
  • Upon withdrawal, LPs receive their share of fees proportionate to their pool tenure and size.
Currently, all trading fees are set to go to LPs.

Illustrative Example

  • Existing LP ('oldLP') holds a $500 position.
  • Trades generate $10 in fees.
  • A new LP ('newLP') deposits $250 to the pool, initiating fee distribution.
  • Post-transaction, the pool's total value is $760 ($500 + $10 + $250).
  • oldLP’s position is now worth $510 ($500 + $10).
  • newLP’s position stands at $250.

Tracking Liquidity Returns

The simplest method to monitor the returns of your liquidity position is by utilizing the LP interface. To access this interface, click on the "Pool" tab within the app.
Please take note of the following:
  • The APR shown is calculated based on the fees and TVL at the pool level.
    • You can utilize this figure to estimate the returns of your position manually.
  • The "Accrued Rewards" displayed on the LP interface only includes the ITGR rewards that you have accumulated before October.