# Fee Types

Dextr implements two types of fees to sustain its operations and incentivize participation within its ecosystem:

### **1. Trading Fees**

 These fees are paid by users who "take" liquidity from the protocol (known as takers). The total fee consists of two parts: 

* **➡️LP Fees:** This fee compensates LPs for supplying assets. LPs quote the fee they wish to charge for settling the trade. LP fees earned are automatically added to the LPs' liquidity reserves. [🔙](/dextr-avmm-whitepaper-v3.0/liquidity-provisioning/liquidity-positions.md#discounted-fee-this-fee-discount-applied-to-a-trader-is-calculated-by-subtracting-the-offered-discou)
* **Protocol Fees:** This fee supports the operational expenditure of the protocol. The protocol Fees is distributed as follows:
  * **25% to DAO Treasury:** To fund community-driven initiatives for continuous improvement and innovation.
  * **25% to Foundation:** To cover operational costs.
  * **25% to Operators:** To maintain robust security infrastructure and protect the protocol against MEV exploits.
  * **25% to Underwriters:** Dextr allocates 25% of the fees to the underwriters involved providing economic security to traders and LPs against MEV.

{% hint style="info" %}
These figures are changeable. Additional fee for Hooks may apply. 
{% endhint %}


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