Biswap liquidity pools connected token reserves, price ranges, and trading fees

Pool reserves and provider positions had different jobs

The pool held the assets traders exchanged, while each provider’s position represented participation in that liquidity. An automated market maker, or AMM, used mathematical pricing rules to execute exchanges against the pool. Traders supplied trading activity; liquidity providers supplied the token reserves those exchanges needed. The fee connected these roles by directing part of the trading charge to the providers whose liquidity supported the exchange. V2 represented liquidity contributions with LP tokens. V3 used a non-fungible token, or NFT, to represent an individual liquidity position. The pool and the position were distinct objects: providers could share a pool while holding positions with different price ranges.

V3 fee tiers identified separate pools

V3 offered several regular-swap fee tiers, and selecting a tier selected a corresponding pool. The historical schedule associated lower charges with more stable pairs and higher charges with more volatile or less liquid pairs. Its categories described the intended use of each tier, rather than a forecast of the return any position would earn.

• 0.015% for stable-token pairs.
• 0.08% for pairs combining a stable token and a non-stable token.
• 0.28% for pairs of non-stable tokens.
• 1% for exotic-token pairs.

These percentages described regular swaps. Limit orders had separate fee treatment, so applying this schedule to every V3 order would mix different mechanisms. A pool’s tier also did not express an annual yield on deposited capital. It determined the trading charge before the protocol allocated the resulting fees.

When did a V3 position earn trading fees?

A V3 position earned fees from trades only while its liquidity was active within its chosen price range. Concentrated liquidity assigned the deposit to that interval. When trading moved outside it, the position stopped participating in fee generation. Holding a position and supplying liquidity at the traded price were therefore different states.

Eligibility alone did not establish an amount of income. Fee earnings also required trading activity and depended on the position’s share of active liquidity. A position outside its range did not earn trading fees simply because other positions in the same pool remained active.

Concentration and competition shaped the active share

A position’s relative contribution depended on how much the provider deposited, the interval over which the position concentrated that deposit, and the amount of competing liquidity active at the same prices when trades occurred.

Concentrating the deposit

A narrower range concentrated the same deposit within a smaller price interval. While active, that concentration could increase the position’s proportion of liquidity supporting trades. This effect remained conditional on the market price staying within the selected range and on the competing active liquidity.

Sharing the traded range

Additional active liquidity

More liquidity from other providers within the same range reduced an existing position’s relative share, with other inputs unchanged. Its own deposit could stay constant while its portion of the trading-fee rewards fell.

Liquidity outside the range

Inactive positions did not earn trading fees. The pool’s total deposited assets therefore did not describe every position’s contribution at the traded price. The relevant comparison for fee participation concerned active liquidity, rather than every deposit associated with the pool.

Trading volume turned a fee tier into fee income

Trading volume and the pool’s fee tier determined the total trading fees collected. A higher tier collected more per equivalent trade, with other inputs unchanged. A pool with a higher tier could still generate less fee income if it received less volume. The amount available to providers depended on both. Biswap V3 allocated 80% of swap trading fees to liquidity providers. The team and treasury each received 10%. Those were shares of the trading fee. An individual provider’s entitlement then depended on its participation in the active liquidity when the trades occurred.

The fee APR, or annual percentage rate, expressed annualized income relative to capital. Its movement reflected changes in trading volume and active liquidity as well as the pool’s tier, so positions sharing a tier could show different APRs.

V2 charged a standard rate with named stablecoin exceptions

V2 used a different fee schedule for swaps on BNB Smart Chain, so its rates required separate treatment from the V3 tiers.

The standard V2 charge

The standard V2 trading fee was 0.2% of the swap amount. That charge supported an allocation among LP rewards, BSW burning, the treasury, and the team. Applying the later V3 allocation to this earlier rate would misstate how V2 divided its fees.

The reduced stablecoin charge

BUSD/USDT, USDC/USDT, and DAI/USDT swaps used a 0.1% V2 trading fee. That exception applied to those named pairs within the V2 schedule; it was not a blanket rate for every stablecoin pool. These historical rates also did not specify the cost of a later aggregated swap using a different pool or route.

Fee accrual and fee collection were separate actions

V3 required manual claims of trading-fee rewards through the position detail page. The old liquidity page listed the positions. Fees could accrue through eligible trading activity without automatically increasing the capital supplied by the position. The accumulated fee balance recorded income awaiting collection. A quoted fee APR therefore did not include an automatic reinvestment process or describe a compounded balance.

View image file

BSW farming rewards belonged to an additional program

V3 Farms added incentive rewards to eligible liquidity positions on BNB Smart Chain. Those incentives described a separate reward stream from the fees traders paid for swaps. A pool position’s trading-fee mechanics did not establish that a farming program would continue funding its incentives or that every position would qualify.

Biswap subsequently announced that BSW emissions had ended and paused V3 Farms and Investment Pool rewards. Later closure announcements included the legacy farming pages. The old farming rates ceased to describe an active offer when rewards were paused.

How did legacy pool withdrawals change?

Biswap announced a dedicated V3 withdrawal tool and later a consolidated interface covering V2 liquidity, V3 positions, and Investment Pool assets. Earlier closure notices had described direct smart-contract withdrawals after the classic interface closed. The later interfaces changed how users could access legacy balances, so the earlier contract-only description did not capture the subsequent withdrawal options.

Investment Pool assets remained a separate deposit category.

Asset values and earned fees determined a position’s outcome

A liquidity position’s outcome combined its underlying asset values with the fees it actually earned. Impermanent loss described how a liquidity position could underperform holding the deposited assets separately as their relative prices changed. Trading fees could compensate for that difference, with the outcome depending on price movement and the income the position generated.

For a legacy position, withdrawal concerned the remaining token balances and earned fees; an earlier APR was not an asset amount.