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Fee System

Overview​

Lunarys uses a Uniswap V2-style fee model where swap fees stay implicitly in reserves. There are no fee accumulators or growth tracking -- this is a deliberate privacy design choice to prevent leaking trading activity information.

Swap Fees​

How It Works​

Swap fees are deducted from the input amount before pricing:

effectiveIn = amountIn * (BPS_DENOMINATOR - swapFeeBps) / BPS_DENOMINATOR

Where BPS_DENOMINATOR = 1,000,000.

The full amountIn (including the fee portion) is added to reserves. The output is computed on effectiveIn only. This means the fee stays in the pool, increasing the reserve-to-supply ratio over time.

Fee Tiers​

TierBPS ValuePercentageExample Pools
Low1,0000.10%eUSDT/eUSD (stablecoins)
Standard3,0000.30%eBTC/eUSD, eETH/eUSD, most pairs

The fee is set per pool at creation time via EPoolFactory.createPool(...) and is stored as a uint24 (public, not encrypted).

Example​

Pool with 0.3% fee (3,000 BPS):

User swaps 1,000 eUSD for eBTC

effectiveIn = 1,000 * (1,000,000 - 3,000) / 1,000,000
            = 1,000 * 997,000 / 1,000,000
            = 997 eUSD

Output computed on 997 eUSD (3 eUSD = fee)
Full 1,000 eUSD added to reserves

Withdrawal Fee​

A 0.05% (500 BPS) fee is applied when removing liquidity:

grossA = sharesToRemove * obfReserveA / obfTotalSupply
feeA = grossA * 500 / 1,000,000
netA = grossA - feeA

The fee stays in the pool, benefiting remaining LPs.

Why a Withdrawal Fee?​

Prevents Just-In-Time (JIT) liquidity attacks where an attacker adds liquidity just before a large swap and removes it immediately after, extracting fees without providing sustained liquidity.

Privacy-Preserving Design​

No Fee Accumulators​

Unlike Uniswap V3 which tracks feeGrowthGlobal and per-position fee snapshots, Lunarys has no public fee tracking. This prevents:

  • Inferring trading volume from fee growth
  • Tracking individual LP earnings
  • Estimating pool utilization from fee data

How LPs Realize Fees​

LPs realize accumulated fees when they call removeLiquidity(). Since the reserve-to-supply ratio has grown from accumulated fees, they receive proportionally more tokens than they deposited.

Fee is Public​

The swapFeeBps value is a public uint24 -- this is by design. The fee rate itself doesn't reveal sensitive information; it's the fee amounts (derived from trade sizes) that would leak privacy. Since trade sizes are encrypted, fee amounts are also effectively hidden.