Fees

Swap Fees

Swap fees are distributed pro-rata to all active liquidity positions at the time of the swap. If the spot price moves out of a position’s range, that liquidity becomes inactive and stops generating fees. When the spot price reenters the position’s range, the liquidity becomes active again and generates fees.

Swap fees are not automatically reinvested. Instead, they are collected separately from the pool and must be manually redeemed by the owner of LP NFT to collect their fees.

Custom Fees

TONCO allows pool creators to set the pool fee with three options available during pool creation:

• 0.05% fee with tick spacing of 10 Best for stable pairs, as the price risk for liquidity providers holding these assets is very low

• 0.3% fee with tick spacing of 60 The most balanced option for the majority of pairs

• 1% fee with tick spacing of 200 Can be used only if you have a highly volatile token (during updates or a launch) and you expect significant trading activity where traders won’t be concerned about the fee

Tick spacing sets the intervals between price points (or “ticks”) in a liquidity pool. For example, with a tick spacing of 60, each tick is 0.6% apart from the next price level.

TONCO retains 10% of fees generated, with the remaining 90% going to liquidity providers.

If you need to set a different fee, TONCO team can create a pool with any fee or change the fee in your created pool. To do so, please contact us at TONCO Support.

The tick to price formula

On TONCO, liquidity positions are represented as NFTs, and each NFT contains metadata specifying the price range selected by the liquidity provider:

📌 Example:

Take a look at this position: View on TonViewer

Its tick range: [-62160 → -56100]

We use the following formula to convert ticks to price:

Where:

• tick = tick value from the NFT

• decimals_S0 = decimal places of token 0 (base asset)

• decimals_S1 = decimal places of token 1 (quote asset)

Finding Token Decimals

You need to check the decimal places of Token 0 and Token 1.

For example, in the TON/USDT pair:

• TON has 9 decimals

• USDT has 6 decimals

Applying the Formula

Let’s calculate the prices for tick -62160 and -56100:

Price = 1.9978 USDT per TON

Price = 3.6621 USDT per TON

When you look at your position in the TONCO UI, the selected range appears like this:

The dynamic fee system is expected to launch in 2025

TONCO brings a dynamic fee structure that automatically adjusts in response to market volatility, significantly improving efficiency. The platform dynamically modifies fees for each liquidity pool based on the current level of volatility, enhancing both fee generation and trading activity.

There will be the ability to set different volatility-based fee ranges for both buying and selling. This allows each liquidity pool to implement a customized fee structure that aligns with specific market conditions. As a result, fees become more reflective of the market’s risk profile, leading to increased trading volume and higher fee generation.