Overview

An an overview of Gradient's fee model

Introduction

Gradient’s fee model is designed to align incentives across all participants—buyers, sellers, market makers, and the platform—while maintaining predictable, non-predatory fees.

At the core of this model is a structured spread-based system that ensures seamless trade execution, liquidity efficiency, and fee transparency.

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Fixed Execution Spread

Rather than charging variable, unpredictable fees, Gradient operates using a fixed execution spread.

	Buyers	Sellers
Gradient	0.25-1.5% buy-side spread	0.25-1.5% sell-side spread
Traditional AMM	Variable slippage + LP fees (typically over 6%)	Variable slippage + LP fees (typically over 6%)

This mechanism allows the platform to:

• Guarantee execution at predictable price points

• Incentivize protocol participation via the distribution of fees

• Maintain a sustainable, transparent, and scalable foundation for fee collection

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Fee Distribution at a Glance

How the 0.5-3% spread-based fee is distributed depends on how the trade was fulfilled.

Filled Using Market Maker Liquidity

If the trade is filled using liquidity from a Gradient market maker pool:

• 50% of the fee is distributed to market makers in that specific token’s liquidity pool.

  • Distribution is proportional to each individual’s share of the pool.

• 10% is distributed proportionally to market makers platform wide.

• 40% is classified as platform earnings.

Peer-to-Peer Match (Direct Counterparties)

If the trade is fulfilled directly between buyers and sellers:

• 100% of the fee is classified as platform earnings.

• No portion is routed to any Market Maker pool.

What is a spread?

A fixed difference between buy and sell prices. In Gradient, this is a deliberate 0.5-3% spread (0.25-1.5% on each side), transparently split between liquidity providers and the platform.

What are LP fees?

A fixed, protocol-defined charge paid to liquidity providers or collected by trading platforms on each trade, regardless of price movement.

What is slippage?

Variable, often unpredictable cost from liquidity constraints or volatility.

Slippage is especially problematic in micro-cap tokens, where liquidity is shallow and volatility is high. Traders frequently suffer major execution losses—even on relatively small orders—due to the inability of AMMs to absorb volume efficiently.