> For the complete documentation index, see [llms.txt](https://all-access-anonymous.gitbook.io/decentralised-intelligent-network-dine/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://all-access-anonymous.gitbook.io/decentralised-intelligent-network-dine/liquidity-provisioning-strategies/dynamic-pricing-structure.md).

# Dynamic Pricing Structure

To optimize liquidity provisioning, we implement a \*\*dynamic fee structure\*\* that adjusts based on trading activity. The fee rate $ f $ is determined as:

**f = fbase + λ V / Vavg**

Where:

* **fbase:** Base fee rate (e.g., 0.3%).
* **λ:** Sensitivity parameter.
* **V:** Change in trading volume over a given period.
* **Vavg:** Average trading volume over the same period.

This ensures that fees increase during periods of high volatility, discouraging excessive speculation and stabilizing the market.