A trading fee that automatically adjusts based on real-time market conditions such as volatility, volume, or liquidity depth. During high-volatility periods, dynamic fees increase to compensate LPs for greater impermanent loss risk; during calm markets, fees decrease to attract more trading volume. Meteora's DLMM pools pioneered dynamic fees on Solana, using a formula that factors in bin-crossing frequency.
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A trading fee that automatically adjusts based on real-time market conditions such as volatility, volume, or liquidity depth. During high-volatility periods, dynamic fees increase to compensate LPs for greater impermanent loss risk; during calm markets, fees decrease to attract more trading volume. Meteora's DLMM pools pioneered dynamic fees on Solana, using a formula that factors in bin-crossing frequency.
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AMMs, routing, liquidity, lending, and trading infrastructure.
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Dynamic Fee (dynamic-fee) Category: DeFi Definition: A trading fee that automatically adjusts based on real-time market conditions such as volatility, volume, or liquidity depth. During high-volatility periods, dynamic fees increase to compensate LPs for greater impermanent loss risk; during calm markets, fees decrease to attract more trading volume. Meteora's DLMM pools pioneered dynamic fees on Solana, using a formula that factors in bin-crossing frequency. Related: DLMM (Dynamic Liquidity Market Maker), Meteora, Fee Tier
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A concentrated liquidity AMM design pioneered by Meteora on Solana that organizes liquidity into discrete price bins rather than continuous tick ranges. Each bin holds liquidity at a single price, and trades move sequentially through bins. DLMM pools feature dynamic fees that adjust based on volatility, and LPs can choose from preset distribution shapes (spot, curve, bid-ask) to match their market outlook.
A liquidity protocol on Solana (rebranded from Mercurial Finance) that introduced the Dynamic Liquidity Market Maker (DLMM) and Dynamic AMM, which automatically adjust fees and liquidity distribution based on real-time market activity. Meteora became a top-3 DEX by volume in 2025 driven by high-profile token launches using its concentrated liquidity pools.
A predefined fee level applied to a liquidity pool or trading pair, typically expressed in basis points. Different fee tiers exist for different asset volatility profiles: stable pairs (e.g., USDC/USDT) use low fees (1-5 bps), major pairs (SOL/USDC) use moderate fees (5-30 bps), and volatile pairs use higher fees (30-100 bps). LPs select fee tiers based on expected trading volume and impermanent loss risk.
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A predefined fee level applied to a liquidity pool or trading pair, typically expressed in basis points. Different fee tiers exist for different asset volatility profiles: stable pairs (e.g., USDC/USDT) use low fees (1-5 bps), major pairs (SOL/USDC) use moderate fees (5-30 bps), and volatile pairs use higher fees (30-100 bps). LPs select fee tiers based on expected trading volume and impermanent loss risk.
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A concentrated liquidity AMM design pioneered by Meteora on Solana that organizes liquidity into discrete price bins rather than continuous tick ranges. Each bin holds liquidity at a single price, and trades move sequentially through bins. DLMM pools feature dynamic fees that adjust based on volatility, and LPs can choose from preset distribution shapes (spot, curve, bid-ask) to match their market outlook.
A liquidity protocol on Solana (rebranded from Mercurial Finance) that introduced the Dynamic Liquidity Market Maker (DLMM) and Dynamic AMM, which automatically adjust fees and liquidity distribution based on real-time market activity. Meteora became a top-3 DEX by volume in 2025 driven by high-profile token launches using its concentrated liquidity pools.
A predefined fee level applied to a liquidity pool or trading pair, typically expressed in basis points. Different fee tiers exist for different asset volatility profiles: stable pairs (e.g., USDC/USDT) use low fees (1-5 bps), major pairs (SOL/USDC) use moderate fees (5-30 bps), and volatile pairs use higher fees (30-100 bps). LPs select fee tiers based on expected trading volume and impermanent loss risk.
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A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
A token issued to liquidity providers representing their proportional share of a pool's reserves and accrued fees. LP tokens can be burned to withdraw the underlying assets. The value of LP tokens changes as the pool's token ratios shift and fees accumulate. LP tokens are often stakeable in yield farming programs for additional rewards.