Adaptive Fee Pools

Adaptive Fee Pools are Orca pools where the trading fee can adjust based on recent price movement and pool conditions. In this guide, you’ll learn what Adaptive Fee Pools are, how they differ from fixed-fee pools, and how they interact with existing Whirlpool concepts like ticks, tick spacing, and fee tiers.

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What are Adaptive Fee Pools?

Fixed-fee pools apply the same fee rate to each swap in that pool. Liquidity providers choose a pool with a specific fee tier, such as 0.05% or 0.30%, and swaps through that pool use that fee tier. Adaptive Fee Pools include two fee components:

• Base fee — The pool’s base fee tier.
• Adaptive fee — A dynamic component that may increase when price movement or volatility conditions increase.

This means the effective fee rate in an Adaptive Fee Pool can change over time. During periods of higher price movement, the effective fee may be higher than the base fee. During calmer periods, the effective fee may be closer to the base fee.

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How to spot an Adaptive Fee Pool in the app

Adaptive fees appear in two places in the Orca interface:

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Pools page filter

Open the filter panel on orca.so/pools and toggle Adaptive Fees to show pools using this fee model.

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Pool detail banner

On an adaptive-fee pool’s detail page, the Create Position panel shows an Adaptive Fees Enabled banner. The percentage shown is the current effective fee rate, including the adaptive component. This rate can change as market and pool conditions change.

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Why Adaptive Fees exist

Market conditions can change over time. In fixed-fee pools, the trading fee remains the same even when volatility changes. Adaptive Fee Pools allow the effective fee rate to adjust when price movement increases. This can affect:

• Fees paid by traders
• Fees accrued by liquidity providers
• The effective fee rate shown in the pool interface

Adaptive fees do not guarantee higher LP returns, lower risk, or better trade execution. LP outcomes still depend on position range, liquidity, trading activity, fees, rewards, price movement, and market conditions.

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How Adaptive Fees work

Adaptive Fee Pools adjust the fee based on price movement during swaps. Behind the scenes, the Adaptive Fee mechanism considers how far the price moves during a trade, including how many tick groups the trade crosses. If price movement is greater, the adaptive component may increase. If price movement is lower, the adaptive component may be lower. For the technical calculation, see the Developer Docs. Key idea:

• If recent price movement is lower, the adaptive fee may be closer to the base fee.
• If recent price movement is higher, the adaptive fee may increase.
• The effective fee rate can change over time.

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Adaptive Fee Pools and LP positions

From an LP perspective, Adaptive Fee Pools add a dynamic fee component to the usual concentrated liquidity position mechanics. Adaptive Fee Pools may be relevant for users who want exposure to pools where the effective fee can change with price movement. They may also be less predictable than fixed-fee pools because the effective fee rate can vary.

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What stays the same?

Many core Whirlpool concepts still apply:

• Ticks and tick spacing define where liquidity is active.
• Fee tiers still apply as the base fee.
• LPs may accrue trading fees when swaps use liquidity in their active range.
• Positions can move in or out of range as price changes.
• LPs still need to monitor position range, token mix, fees, rewards, and market conditions.

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Important considerations

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Effective fees can change

The displayed effective fee rate includes the adaptive component and may change as price movement changes.

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LP returns are not guaranteed

Adaptive fees may affect fee accrual, but they do not guarantee higher returns. Actual results depend on trading activity, liquidity, position range, price movement, rewards, and market conditions.

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Trader costs may vary

Swaps through Adaptive Fee Pools may have a different effective fee depending on pool conditions at the time of the trade.

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Pool routing may vary

Aggregators and routing systems may consider fees, liquidity, price impact, and route availability. Adaptive fees may affect whether a pool is used in a route.

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Adaptive Fee Pools still carry LP risks

Adaptive Fee Pools do not remove risks such as impermanent loss, out-of-range positions, token price movement, or changing market conditions.

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Conclusion

Adaptive Fee Pools add a dynamic fee component to Orca Whirlpools. The effective fee rate can change based on price movement, while the pool still uses familiar concentrated liquidity concepts such as ticks, tick spacing, fee tiers, and active ranges. Before creating or managing a position in an Adaptive Fee Pool, review the current effective fee rate, position range, price impact, liquidity, rewards, and market conditions.