Add Protocol Fees to Dynamic and DLMM Meteora Pools [Draft]

Proposals
1

Currently almost all Meteora Pools charge 0% protocol fees. The only protocol fees that Meteora is charging has been 20% for Dynamic Memecoin Pools and 15% for DLMM Bootstrapping pools. Both of these pools are variants of our AMM pools that have been designed to support token launches.

Originally the motivation for zero protocol fees was to drive growth of the protocol. After all this time, it’s clear that zero protocol fees have not been the major driver of growth for Meteora. Instead, improving our tech platform, adding product value, and the growth of our LP army have formed the core pillars for Meteora.

We are proposing to turn on protocol fees on Meteora for Dynamic and DLMM pools for several reasons:

  1. If zero protocol fees does not drive growth and product, tech, and community are the main foundations for growth then Meteora will need to funnel more funds to grow each of these areas and so will need to build up its revenue streams to funnel this growth. We also imagine investing in community-driven content, education, and marketing efforts.
  2. Meteora development and operating costs are currently being funded by the team. Adding fees will start down the path of making Meteora sustainable in the long run and better position the protocol for its long term goals of bringing LPing and DeFi to the mases.
  3. Lastly this brings Meteora with parity to other DEX fees and curbs some abuses happening on the platform.

We are proposing a protocol fee structure of 15% of LP fees for any pools that charge 0.25% in LP fees and above. Pools with fees less than 0.25% will continue with 0% protocol fees. Dynamic Memecoin pools and DLMM Bootstrapping pools will charge 20% of LP fees. These special class of pools need a higher level of investment to tackle the problems around token launches…

Protocol fees will flow into the Meteora team treasury and from there will fund the LP Army multi-sig. We intend to immediately kick off new LP army growth initiatives with this new revenue source. For example all fees collected on memecoin tokens can be used for new LP Jam, Bootcamp, or community collaborations with their respective projects. And with additional revenue we can start to grow out our LP army initiatives from working groups, to forming international LP army groups (Korea, China, Japan, etc…)

As always, we work on all major decisions together, so let us know what you think of the proposal and how we can make it better.

Ben

16 Likes
2

Interesting approach.

I want meteora to have a long sustainable runway.
Protocol fee it is!

2 Likes
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Definitely something to discuss in the office hours. Think a lot would not agree on the 15% structure even if it only applies to >0.25% pool fees. Then again, I all for it for the long term and sustainable environment.

1 Like
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I support Meteora growth , so LFG!

2 Likes
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I think fees should be discussed one more time between the LP army privates and LP army community before anything is permanently imposed

1 Like
6

This seems like a logical step in the formation and lifecycle of any protocol.
Ultimately, this is also a business and you cannot endlessly finance it out of your pocket, the business must bring income to its creators.
LFMET

1 Like
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As a whale player, I’m not really on board with the 15% DLMM fee—it’s one of the highest on Solana. Sure, it could help the project grow, but we also have to think about how important liquidity is. Liquidity providers are already taking on a lot of risk, and this kind of fee could push some of them away. I feel like the 7.5% fee we talked about before makes more sense.

I get that the meme market is pretty hot right now, but I don’t think we’ve hit the peak yet. So, making such a big jump with fees could end up affecting users in a bad way.

5 Likes
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Thanks for sharing the proposal. While I understand the need to generate revenue, a sudden 15% fee on LPs feels like a big jump, especially without a clear breakdown of where these funds will go.

Many of us take on significant risks by providing liquidity, particularly in volatile meme pools above 0.25%. It feels unfair that LPs would be taxed 15%, especially when those who can’t participate in LP Army initiatives don’t have a direct way to benefit from the fee. Compared to Raydium, which uses part of their fee for $RAY buybacks, and Orca, which taxes traders instead of LPs… this structure seems more taxing.

If a fee is necessary, something closer to 1-5% would feel more reasonable. Additionally, tying the fee to platform improvements—like UI upgrades or clearer user benefits—would help justify the change. Right now, without $MET being live, there’s no direct financial upside for LPs, which makes it hard to support such a large cut.

In short, we support sustainability, but transparency and fairer fee levels are needed to get the community on board.

12 Likes
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Why do professional players need an LP army, Bootcamp and etc.? It seems to me that DAO and Governance should be done first. And already then on the basis of their decision to introduce fees and determine what these fees will be used for. Maybe it’s time to update your documentation?

Check this out:

Sequence Of Events
We believe that the combination of this 3 aspects — product, community, incentives will be the key to a holistic plan that will supercharge Solana TVL in 2024 and beyond.

We expect the timeline to be as follows:

  • Early Dec: DLMM capped beta, MET dao formation, proposal discussions

  • Mid Dec: Open beta, MET DAO proposal voting for community and LPs

  • 1st Jan 2024: MET stimulus package for LP starts

  • Early 2024: MET liquidity event.

Check this out:

Details coming soon!

You can be part of the growth and development of Meteora through governance. We encourage you to review our product roadmap, the $MET One Year Plan, and our upcoming initiatives.

5 Likes
10

I’m in favor of turning on protocol fees, but I think this proposal is pushing the rate too high, too fast. There are a few assumptions here that need rethinking:

1. 15% doesn’t align with other platforms since TGE hasn’t happened yet:

A 15% fee on the LP side seems like it’s in line with other DEXs, but it’s actually more taxing. Orca, for example, taxes traders for its treasury, and Ray taxes LPs, but 12% of Ray’s 16% fee goes to $RAY buy-backs, benefiting its users.

Under this proposal, MET LPs would only benefit by becoming actively involved—whether that’s growing the LP-Army, hosting streams, or creating content. Meanwhile, a Ray user can simply buy $RAY and reap the benefits. This structure feels a bit like the CLOUD allocation model—those who don’t have the time or ability to contribute get left out, yet they’re still expected to take on the same financial and platform risks, now increased by the 15% fee.

Plus, the treasury allocation for LP-Army becomes subjective and controlled by a non-elected team, which raises fairness concerns. Since TGE hasn’t happened yet, it seems off to penalize people who are happy to just deposit their funds and support the platform but can’t (or don’t want to) get involved in the LP-Army. At 15%, there needs to be a significant portion of that influencing MET’s price so that people who want to contribute with funds, not time, still benefit.

2. This could hurt Meteora’s growth in the LP-meme niche:

Meteora’s focus on dominating the meme sector is clear, but these fees would hit the risky pools hardest, making it even tougher to turn a profit in an already challenging, high-risk space. This could push users to stop providing liquidity and just trade instead, where they can use tools like stop-losses to better manage their risk/reward.

Those who prefer low-risk, low-fee pools aren’t taxed, but they’re also not contributing to the growth of this crucial sector for Meteora.

3. Zero protocol fees probably did drive growth:

Meteora has attracted users because, even with less TVL, LPs tend to be more profitable than on other DEXs. Yes, this is largely due to the DLMM being a more productive product, but the zero-fee structure has played a huge role too. The perception that Meteora is more profitable has been a major driver for user acquisition. Introducing such a high fee risks damaging that reputation.

Suggestions:

  • Until TGE happens, lower the LP fee to 2-5% and consider sharing the cost with traders if more funds are needed.
  • If you’re set on increasing fees, it should be tied directly to $MET’s value, perhaps through a buy-back mechanism.

At this point, I believe we need to tread carefully and balance the need to grow LP-Army with keeping the edge that’s made Meteora successful so far.

14 Likes
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I want Meteora to be sustainable. The only question is why choose pools with 0.25% fee vs 1% fee? Wouldn’t it be best to start with pools that can afford to share their fees with the protocol. I also think a tiered system should be used.

1 Like
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Nice proposal for the sustainability of the protocol

1 Like
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I think fee’s are needed in platform growth and sustainability. But i think suggested fee ratios are too much. Im suggesting %5 instead of %15 and %7 instead of %20.
∽Wind∽

1 Like
14

I love Meteora but 15 -20% commissions for DLMM meme would kill the whole point of the project.

  1. providing liquidity for this market involves high risks
  2. if you give such a large amount of fii to the protocol, your profit will decrease in times. it will be impossible to stay in the plus as often the commissions will cover the loss of the main balance and you will remain in a small profit.
  3. I propose to introduce commissions at the level of 3-5% max after TGE. Before TGE let’s leave it at 0%.
1 Like
15

I support this… atleast it helps in long run

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Still to this day I can’t comprehend why meteora went with 0% fee in the first place.
However regardless of the timing, I wholeheartedly support this initiative. Fees for platform can be contributed towards several key aspects of growing the platform.
Good luck guys

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Providing liquidity comes with inherent risks, particularly in more volatile pools with rates above 0.25%. A 15% charge places a heavy burden on LPs, and it seems unfair that those who aren’t involved in the LP Army initiatives won’t directly benefit from these fees.
maybe after tge in my oppinon

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I support as well. This is for the pools above 0.25% fees. For consideration 1% fee pool would still bring 0.85% to your which is quite a lot. We have to think about this platform as an engine. It’s one of the best platforms out there, support is def needed. Pools with massive volumes and massive TVLs are under 0.25% fee anyways, so the ones that want to earn quick buck with memes, will still earn it, but leave 15% tip to the platform creators, don’t be too greedy you still get 85%.

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▲lex poked me to give my 2c. I’ve been afk from the community for awhile :frowning:

Comparing the fees with Orca, they charge 12%. Going higher than that is not a good idea. I think going at parity achieves the desired outcome. I personally wouldn’t move for 3% of fee generated, but some might. If people prefer Meteora as a platform, you don’t want them to think of the trade off of higher fees.

I think being at par with other DEX is good.

In terms of funding, I’d look at it from a tokenomics perspective. To pay for cost of the team and all the initiatives, it either comes from fundraising or from revenue.

If it was 2021, I’d say, forget fees, we pay for all of this using tokens and worry about monetizing later. I don’t think we’re in this era anymore. Especially not with an aggregator being where everyone go. I think in 2024, going for revenues sends the right signal for TGE.

TLDR: Yes, but 12%, not 15%.

1 Like
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I’d be careful about fees esp pre airdrop. The low fees and ability for anyone to participate is very Jupiter like. This can definitely be revisited mid bull.