SNAP Basic Training 02: Fees 101

You learned how routing and slippage shape execution. Now follow the money.

Every swap pays a fee. That fee is assigned to the pools your route touched, and only to liquidity that was active when your trade cleared. Price inside your range means the tap is on. Price outside your range means it is off.

Your job is simple: choose sensible ranges, join pools with real activity, and claim when it is worth it.

Where the fee goes

Think of each pool on your route as a toll booth. When your swap passes, the booth takes a small toll. If your trade uses one pool, one booth gets paid. If the route splits across two or three pools, each booth collects on its slice. Those fees are earmarked for liquidity that was active in that pool during the trade. Active means in range. In range means earning.Key points:

• The fee rate is shown on the pool page
• Fees are collected at the moment the swap happens
• Only active liquidity receives them

Swap fees you pay vs LP fees you earn

• As a trader, you pay a fee on each pool the route touches
• As an LP, you earn the fees paid by traders while the price sits inside your range
• If the router skips your pool, you earn nothing from that trade
• If the router uses your pool for only part of the route, you earn only on that part

In range, out of range, and your asset mix

SNAP uses concentrated liquidity. Liquidity sits inside price ranges, not across every price. When market price sits inside your range you earn. When price moves out, earnings pause until it returns. While price moves, your asset mix shifts. You can end up holding more of one token and less of the other. That is normal. You decide ranges with intent, then check back to see if they still make sense. Picture a stretch of road with a toll booth. When traffic flows through your stretch, you collect. When traffic moves down the road, your booth goes quiet.

Volume and active TVL

Two forces shape what you can earn.

• Volume is the flow of swaps through the pool. More flow means more fees to share
• Active TVL is how much liquidity competes with you inside the current price band. More competitors means a smaller slice for you.You do not control either directly, but you can choose which pools to join and how wide your range is. Look for steady activity and a level of active liquidity where your share is not tiny.

Routing changes who gets paid

SNAP’s router tries to reduce slippage. Sometimes your order takes two side roads instead of one highway. If 70% of your trade uses Pool A and 30% uses Pool B, LPs in Pool A earn from the 70 and LPs in Pool B earn from the 30. If a pool is not used, nobody in it earns from that trade. Your chosen pool might not be used on every route. Busy pairs often spread flow over several pools. In practice, a popular pool with constant traffic can beat a quiet pool with a higher fee rate.

Choosing range width

Range width is a trade off.

• Narrow ranges concentrate your liquidity. While in range, earnings per unit of capital can look strong. The risk is dropping out fast when price moves
• Wider ranges keep you active more often. Earnings per unit are lower, but uptime improves and you rebalance lessMatch width to the pair. Quiet, closely linked assets can handle tighter bands. Choppier pairs often need wider bands to avoid constant maintenance.

Fees and impermanent loss

Fees can help offset impermanent loss. They do not erase it. If a pair drifts or trends hard, your position’s value can lag a simple hold. The only honest approach is to watch both the fees you collect and how your asset mix and value change. If volume is steady and the pair is calm, fees can add up. If liquidity is thin and price jumps around, fees may not be enough.

Claiming and compounding

Fees sit in your position until you claim them.

• Claim when the amount is worth the gas
• Small positions benefit from batching claims
• To compound, add claimed tokens back to liquidity when they are sizeable enough to justify a click
• A simple weekly check in is enough for most people

Simple fee sanity checks before you LP

Open the pool page and confirm:

• Fee rate is clear and appropriate for the pair
• Recent volume is real, not a one day spike
• Current price and the visible active band are near your intended range
• Notes on fee behaviour during volatile periods, if anyIf volume looks thin or active liquidity is huge, consider a different pool or a different width.

Your task

1. Open SNAP and pick one active pool.
2. Read the posted fee. Look at recent volume.
3. Decide a sensible range around the current price.
4. Do a light exercise with no numbers. Imagine the price moving a little up and a little down.
5. Would you still be in range most of the time, or would you drop out quickly?
6. Make a tiny test position with a slightly wider band than your first instinct.
7. Leave it for a few hours.
8. Come back and check two things only: Did any fees accrue? And did your asset mix change in a way you understand?

Write it down. You are building a feeling, not chasing a score.

Mission takeaway

Fees follow flow. You earn when price sits in your range, when trades actually happen, and when your share of active liquidity is meaningful after gas. Keep those three in view.

Start small. Claim sensibly. Learn the rhythm of your pool before you scale.