DBC Dynamic Fees - Meteora Documentation

DBC dynamic fees are an optional fee layer that responds to recent price movement. When the launch becomes more volatile, the dynamic fee can increase. When activity calms down, the dynamic fee decays. This lets a launch price volatility without permanently raising the base fee.

How Dynamic Fees Fit With Base Fees

Every DBC pool has a base fee mode. Dynamic fees sit on top of that base fee.

\text{Total Trading Fee} = \text{Base Fee} + \text{Dynamic Fee}

If dynamic fees are disabled, the dynamic fee is zero.

How It Works

DBC tracks recent price movement with a volatility accumulator. When swaps move price, the accumulator can increase. As time passes, the volatility reference can decay. The final dynamic fee is calculated from that volatility measurement and the dynamic fee settings.

Setting	Product Meaning
Bin step	Price sensitivity used to measure movement.
Filter period	A short window that smooths very high-frequency updates.
Decay period	The time window after which volatility can decay or reset.
Reduction factor	Controls how much the volatility reference decays.
Max volatility accumulator	Caps the volatility measurement.
Variable fee control	Controls how strongly volatility affects the fee.

Dynamic Fee Formula

\text{Dynamic Fee} = \left\lceil \frac{(\text{Volatility Accumulator} \times \text{Bin Step})^2 \times \text{Variable Fee Control}}{100000000000} \right\rceil

In product terms:

More recent price movement can increase the fee.
The fee is capped by configuration so it does not grow without bound.
The fee can cool down as volatility decays.
The total trading fee is still capped at 99% after the base fee and dynamic fee are added.

Why Use Dynamic Fees

Volatility Response

Fees can increase when price movement becomes more intense.

Launch Protection

Dynamic fees can add extra cost during sudden demand spikes.

LP Compensation

Fee capture can increase during moments when the pool is taking more price risk.

Works With Base Modes

Dynamic fees can be paired with fixed fees, schedulers, or rate limiter fees.

Product Examples

Fixed Fee + Dynamic Fee

The launch keeps a simple default fee, but the fee can rise during volatile bursts.

Time Scheduler + Dynamic Fee

The launch starts with high time-based fees and adds volatility response on top.

Rate Limiter + Dynamic Fee

Large buys can pay more through the rate limiter, while volatility can add another adaptive layer.

SDK Helper Behavior

When using DBC SDK curve-building helpers with dynamic fees enabled, the helper-generated dynamic fee is designed around a maximum dynamic fee of up to 20% of the base fee. Example:

Fee Layer	Example
Base fee	1.00%
Max dynamic fee from helper	Up to 0.20%
Total fee	Up to 1.20%

This is a helper-level product convention for common launch configurations. Custom configurations still need to respect the program’s dynamic fee validation rules, including the default 1 bps bin step, filter period below decay period, reduction factor at most 10000, and volatility parameter caps.

Documentation Index

​How Dynamic Fees Fit With Base Fees

​How It Works

​Dynamic Fee Formula

​Why Use Dynamic Fees