Fee structure

Although often perceived as unnecessary or redundant, fee distribution in Watt protocol plays a pivotal role by unlocking arbitrage opportunities otherwise inaccessible to most of Solana users.

Each Watt liquid-staked token carries a specific fee configuration at the token level. This fee structure maintains the volatility farming flywheel. Initial token wrappers and liquidity providers determine the optimal fee structure. The table below outlines the fees associated with each applicable action.

Fee	Allowed range	Note
Wrap fee	0 - 10%	The sum of wrap and unwrap fee must be greater than 0.8%
Unwrap fee	0.4 - 10%	The sum of wrap and unwrap fee must be greater than 0.8%
Burn rate	10 - 50%	See explanation in Burn rate
Buy or sell fee	0.55 - 4%	Recognized as a transfer fee, applies on any swap or transfer between wallets

It is generally advisable to set higher fees for more volatile assets, such as meme or AI tokens, while adopting a more conservative approach for less volatile assets like utility or governance tokens.

A small protocol fee is collected following each fee deduction to support the sustainable growth and expansion of the protocol.

Once established, the fee structure cannot be altered from the app interface.