Swap Fees

There is initially planned to be a 10% fee for all internal market swaps which, like everything, is subject to change before the final release. Half of this fee will be burned, and can be reduced by contributing to the Desalinization Process in a particular Region. The other half of the fee will be split up among all of the players who have provided liquidity to the pool being used in proportion to the amount of liquidity they have provided compared to the total liquidity in the pool. The fee will be added to the total liquidity in the pool so that each time a transaction is made the value of the LP shares for everyone who has provided liquidity to the pool will increase.

When making a swap that goes between two separate liquidity pools (swapping one resource for another), half of the fee will go to the first pool and the other half will go to the second pool. When selling a resource for DEC, the full fee will still need to be paid even though only one pool is being utilized, and the entire fee will go to that pool. When purchasing a resource for DEC, only half of the normal fee for the Region will need to be paid which will also go to the pool being utilized. This will help encourage players to put DEC into land rather than taking it out.

Some players may note that 10% is quite high for a swap fee as compared to other AMM platforms, however this is very different than a typical DeFi token swap protocol. As we are trying to model the Secret of Praetoria expansion loosely off of what a real-life, physical economy might look like in Praetoria, swapping resources involves things like labor, transportation costs, etc. which are all part of the fee. As mentioned above, these costs can be reduced by as much as 50% by contributing to the Desalinization Process in the Region.