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Haircut (swap fee) collected is automatically distributed when its value exceeds
Pool.mintFeeThresholdduring deposit and withdrawal transactions. This value is usually set at a value of about $10 USD. Alternatively, users can call
Pool.mintFee(address token), which is supported from V3 pool contracts, to instantly distribute fees.
Haircut is distributed in 3 portions:
- LP dividend: A certain amount of haircut is distributed to LPs, which is determined by
Pool.lpDividendRatio. The underlying token amount for LPs increases accordingly. The ratio can be checked using
- Retention: Some haircut is retained in the tip bucket of the pool. The ratio could be checked by
Pool.retentionRatio. It can be used to fill the pool if the retention factor drops below 1, or retrieved by the pool owner for other uses.
- Remaining haircut are transferred to
Currently, 50% of haircuts are allocated to "LP dividend" and the remaining 50% are allocated to "Retention". For USD+ family of assets, haircuts allocated to "Retention" are transferred to
feeToto ensure proper skimming.