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.