Fees

Baso Finance is a platform that maintains trading fees in the original tokens traded. For instance, if you trade $USDC and $Baso, the fees will be retained in these same tokens.

The trading fees for liquidity pools of Stable Pools and Variable Pools are set at to 0.05% and 0.2%. It's worth noting that these two types of pools can be assigned different trading fees on Baso Finance.

Stable Pools Stable pools are specifically designed for assets that exhibit little to no volatility. The pricing formula used for these assets allows for low slippage, even when dealing with large trading volumes. The formula used is:

$$x³y + y³x ≥ k$$

Variable Pools On the other hand, variable pools are designed for assets that have high price volatility. These pools utilize a generic Automated Market Maker (AMM) formula:

$$x × y ≥ k$$

These mathematical formulas are used to ensure that the total liquidity of the pool remains constant at all times.

To help visualize these concepts, consider the following comparison between the stable (red) and volatile (green) AMM pricing equations, where:

• x represents the amount of the first asset in the pool

• y represents the amount of the second asset in the same pool

• k is a fixed constant

This comparison provides a clear understanding of how the different pool types function within Baso Finance.