> ## Documentation Index
> Fetch the complete documentation index at: https://docs.berachain.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Fees

> How trading fees are split between LPs and the protocol and compounded in pools.

Fees are collected on every trade conducted on BEX. A portion of these fees goes to 1) liquidity providers (LPs), and 2) `$BGT` holders.

## Fee distribution

Trading fees for LPs are directly compounded inside the pool so that you don't need to perform a separate claim transaction. For example, if token prices within your pool are unchanged between deposit and withdrawal, but there have been trades in the interim, you see a higher balance upon withdrawal due to the accumulation of fees.

The portion of fees going to LPs is set at the time of pool creation, starting from 0.01% for stable pools, and ranging up to 0.3%, 0.5%, and 1% for weighted pools. The lower fee tiers are generally more appropriate for stable pairings (e.g., stablecoins and blue-chip assets), while the higher fee tiers may be more appropriate for exotic assets.

Trading fees in BEX are split 50/50 between LPs and the protocol. Protocol fees are collected in the `ProtocolFeesCollector` contract, where the fees are auctioned for `$HONEY` and subsequently distributed to `$BGT` stakers.