# Fees ### Swap Fees Swap fees are allocated proportionally to all liquidity within the range1 during the swap. When the spot price moves outside a position's range, the associated liquidity becomes inactive and ceases to generate fees. If the spot price reverses and reenters the position's range, the position's liquidity is reactivated and begins generating fees again. Swap fees are not automatically reinvested as in previous V3 versions. Instead, they are gathered separately from the pool and must be manually claimed when the owner decides to collect their fees. ### Pool Fees Tiers WAGMI introduces multiple pools for each token pair, with each pool having a distinct swapping fee. Liquidity providers can initially create pools at three fee levels: 0.05%, 0.15%, 0.30%, and 1%. Additional fee levels may be introduced by WAGMI governance. Previously, dividing pairs into separate pools was impractical due to liquidity fragmentation concerns. Any advantages gained by offering more fee options invariably led to a net loss for traders because of reduced pairwise liquidity and the resulting increase in price impact upon swapping. The implementation of concentrated liquidity separates total liquidity from price impact. With price impact concerns addressed, dividing pairs into multiple pools becomes a viable strategy for enhancing the functionality of a pool for assets that were underserved by the 0.30% swap fee. ### Finding The Right Pool Fee We expect that certain asset types will be drawn to specific fee tiers where the incentives for both swappers and liquidity providers are closely aligned. Low volatility assets, such as stablecoins, will likely gather in the lowest fee tier because the price risk for liquidity providers holding these assets is minimal, and swappers will aim to achieve an execution price as close to 1:1 as possible. Conversely, we anticipate that more exotic or infrequently traded assets will naturally gravitate towards a higher fee, as liquidity providers will want to offset the cost risk of holding these assets throughout their position's duration. ### Protocol Fees WAGMI includes a protocol fee that WAGMI governance can enable. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.wagmi.com/wagmi/fees.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.