Fees and returns

Where the money comes from, where it goes, and why some return figures are hidden.

How fees accrue

Every swap pays the pool's fee tier. That fee is distributed across the liquidity active at the price where the swap happened, in proportion to each provider's share of it. Fees accumulate against your position and sit uncollected until you claim them. They do not compound on their own.

Because the distribution is proportional to active liquidity, two facts follow. Your position earns nothing while it is out of range, no matter how much is in it. And a narrower range earns more per unit of capital while in range, because that capital represents a larger share of a smaller pool of active liquidity.

The return figure

The percentage shown against a pool is the fees it paid out over the last day, divided by its depth, annualised. It describes the pool, not your position. Your own return will be higher than it while you are in range and zero while you are not.

It is withheld in two cases:

• Depth below $100,000. At that size a single large swap moves the numerator enough to produce a four-digit annualised figure that will not survive the day.
• Daily volume greater than depth. That ratio is the signature of a pool being churned rather than provided for, and the arithmetic stops describing anything repeatable.

Where a figure is withheld the column reads —. A blank that is honest is more useful than a number that is technically correct and practically misleading.

Why Otter takes nothing

This is worth stating precisely, because "no fees" is a claim every product makes. While your position token belongs to you, claiming fees sends them from the pool contract straight to your wallet. There is no step in that path where a share could be diverted.

Charging a fee would require the position to belong to a vault contract instead of to you — the same trade as automatic rebalancing in different clothes. So zero is a consequence of the custody model rather than a promotional rate. It also means this product cannot be funded that way, and any future funding will have to be visible and separate.