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  2. /Glossary
  3. /Adaptive Fee
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defi

Adaptive Fee

DEX trading fees that automatically adjust based on market conditions like volatility or trading volume.

Definition

DEX trading fees that automatically adjust based on market conditions like volatility or trading volume. During high volatility, fees increase to protect liquidity providers from impermanent loss. During calm markets, fees decrease to stay competitive. Uniswap V4 hooks can enable adaptive fees.

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Related Terms

AMM (Automated Market Maker)

A type of decentralized exchange that uses math formulas instead of order books to price trades.

Impermanent Loss

The difference between holding tokens in a liquidity pool versus just holding them in your wallet.

Liquidity Pool

A pool of tokens locked in a smart contract that enables decentralized trading.

1inch

A DEX aggregator that splits trades across multiple decentralized exchanges to find the best overall price.

Aave

One of the biggest lending and borrowing protocols in DeFi.

Across Protocol

A cross-chain bridge that uses an optimistic verification system and a network of relayers to move tokens between chains quickly.

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