> For the complete documentation index, see [llms.txt](https://docs.ambient.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ambient.finance/users/dynamic-fees.md). # Dynamic Fees Unlike traditional AMMs, Ambient allows for *dynamic liquidity fees*. That involves periodically adjusting the fees in a pool over time to reflect changing market conditions. Some AMMs support multiple fee tiers across the same pair. Initially Ambient will run with a single pool type with a dynamically adjusted liquidity fee. That assures that all LPs receive the market-optimal fee tier without having to manually move positions between pools. Pool fee tier is titrated by an external policy oracle, which can be continuously update over time without any changes to the underlying DEX smart contract. The general idea is that lower fee tiers tend to out-perform during periods of market calm, as most swappers patiently route to the lowest cost pools. In contrast during periods of high volatility, demand for liquidity runs hot. Swappers will pay high cost to access immediate liquidity when. The current fee tier model utilizes the fixed tier Uniswap V3 pools as a guineau pig. The policy oracle snapshots the accumulated returns to in-range liquidity every 60 minutes. The Ambient fee tier for that pair is dynamically toggled to whichever liquidity UniV3 pool is performing best over recent history. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://docs.ambient.finance/users/dynamic-fees.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.