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docs/protocol/fees-and-reserves

Fees and Reserves

Trading Fee

A flat 0.30% fee (30 bps) is applied to every buy and every sell. The fee is taken in token-space: tokens minted on a buy are reduced by 30 bps before being delivered to the user; tokens burned on a sell are correspondingly augmented before the curve math runs.

The fee is not held in a treasury, claimed by anyone, or routed to operators. It is sent directly to 0xdEaD and removed from circulating supply forever.

This means every trade. Buy or sell. deflates total existing supply by 30 bps of the tokens that pass through it. There is no recipient. No yield-bearing pool. No fee switch. No off-chain governance over the fee rate.

Reserves

The hook contract holds an ETH reserve. The reserve is the source of truth for what the curve owes sellers: it stores every wei ever paid in (less every wei ever paid out). Properties:

  • Increases on buys (user → reserve).
  • Decreases on sells (reserve → user).
  • Cannot be drained by anyone other than legitimate sells through the curve.
  • No admin withdrawal function. No emergency drain. No pause.

The reserve is also where the floor price comes from: floor = reserve / existing supply. Because supply only ever decreases (burns) and the reserve is only ever altered by curve trades at curve prices, the floor cannot retreat under normal operation.

Floor-Only-Up Property

A first-time visitor's mental model:

  1. Buyer pays ETH for NAKA → reserve grows, supply grows, floor grows on the burn portion.
  2. Seller redeems NAKA for ETH → reserve shrinks, supply shrinks, floor recomputed.
  3. Across both directions, the burn portion ratchets the floor in one direction only.

This is not a guarantee of price (markets price assets above the floor based on demand), but it is a guarantee of a reserve-backed lower bound that strengthens with every trade.

On-Chain Reads

You can read these values directly from the hook contract:

  • actualEthBalance(). Current reserves in wei
  • floorPrice(). Current floor in eth/token (1e18-scaled)
  • marginalPrice(). Current marginal curve price (1e18-scaled)

The frontend at naka.exchange surfaces all three in the stats panel and detailed price card.