CLMM Fees Explained: How Concentrated Liquidity LPs Earn
CLMM fees are the trading fees a concentrated liquidity pool pays its LPs. Every swap pays the pool's fixed fee tier, and that fee goes to the providers whose price range covers the current price. Concentrate your capital in a tighter range and you own a bigger share of the in-range liquidity, so you collect more of each fee, until price leaves your range and you earn nothing.
Table of Contents
The short version
A CLMM (Concentrated Liquidity Market Maker) charges a fixed fee on every swap, set by the pool's fee tier. It pays that fee to the LPs whose price range covers the current price, split by each LP's share of the liquidity in range. Two levers decide your income: the tier you pick and how tightly you concentrate your capital. A tighter range earns more fees per dollar while price sits inside it, and zero the moment price leaves.
What are CLMM fees?
CLMM stands for Concentrated Liquidity Market Maker, the model Uniswap introduced with v3 and the one Raydium CLMM and Orca Whirlpools use on Solana. Instead of spreading your capital across every possible price, you pick a lower and upper bound and deposit into that band. Fees work the same way they do on any AMM, with one twist: only the liquidity that covers the current price earns.
Here is the flow. A trader swaps against the pool and pays the fee tier on the size of their trade. Most of that fee goes to the LPs who are in range at that moment, in proportion to how much of the working liquidity each one supplies. The fees accrue to your position while price trades inside your range, and you collect them when you withdraw or claim.
The catch sits in three words: while in range. A concentrated position that has drifted out of range earns nothing, no matter how busy the pool is. So CLMM fee income is never just the tier; it is the tier multiplied by how much volume trades inside the range you chose. For the wider comparison of the two concentrated models, see DLMM vs CLMM.
Fee tiers: 0.01% to 1%
Each pool has a fixed fee tier, chosen when the pool is created. The same token pair can have several pools at different tiers, and liquidity tends to gather in the tier that fits the pair. Raydium CLMM pools use four tiers: 0.01%, 0.05%, 0.25%, and 1%. Orca Whirlpools offer a set of fixed tiers as well.
| Fee tier | Fits | Why |
|---|---|---|
| 0.01% | Stablecoin pairs | Price barely moves, so LPs win on volume, not on a fat fee |
| 0.05% | Correlated or blue-chip pairs | Tight spreads and steady flow reward a low tier |
| 0.25% | Standard volatile pairs | Higher fee offsets more price movement and impermanent loss |
| 1% | Long-tail and new tokens | Thin, jumpy markets need a big fee to pay LPs for the risk |
The rule behind the table: the more a token moves, the higher the tier LPs need to make providing worthwhile. A 0.01% fee on a stablecoin pair works because huge size trades against a tight spread. A 1% fee on a fresh memecoin works because the price swings hard and LPs need paying for holding through it.
Why a tighter range earns more
The fee tier is only half the story. The other half is how tightly you concentrate. In a plain AMM your capital spreads from zero to infinity, and almost all of it sits at prices the token never reaches, earning nothing. A CLMM lets you pack that same capital into the band where trading actually happens.
The effect on fees is direct. The tighter your range, the larger your share of the in-range liquidity per dollar, so you collect more of every fee while price sits inside. A narrow range around the current price can earn many times what the same dollars would earn spread wide. This is what people mean by capital efficiency: more fees from less money.
Nothing is free. A tighter range also leaves range faster. Pull in too close and a normal move pushes price past your upper or lower bound, at which point you earn zero and hold the token that just fell. The fee math pulls you tight; the risk of going out of range pulls you wide. Every CLMM position lives in that tension.
CLMM fees vs DLMM dynamic fees
A CLMM charges one fixed tier, the same in calm and chaos. Meteora's DLMM takes a different path. It charges a base fee plus a variable fee that rises when trading turns volatile. When a burst of trades hits a bin fast, the fee that bin charges can climb, so LPs are paid more for supplying liquidity exactly when it is riskiest.
The practical difference: on a CLMM you accept the tier and manage your range. On a DLMM the fee itself leans into volatility, which can pay off on tokens that move in sharp bursts. Neither is strictly better. A fixed tier is simple and predictable; a dynamic fee tries to match the fee to the risk of the moment.
DLMM also lets you shape how liquidity spreads across your bins, which changes where your fees come from. That is a separate lever from the fee itself, covered in DLMM bin distribution: Spot vs Curve vs Bid-Ask.
What cuts into your fee income
Gross fees are not net profit. Three things eat into what you keep:
- Impermanent loss. When price moves, a concentrated position converts toward the weaker token. Fees have to clear that loss before you are ahead. A tight range earns fast but takes on impermanent loss fast too.
- Time out of range. Every hour your position sits outside its range is an hour it earns zero. A high fee tier means nothing if price is never in your band.
- Crowding. Fees are split by share of in-range liquidity. If other LPs crowd the same range, your slice of each fee shrinks even when volume is strong.
This is why chasing the highest tier rarely wins. A 1% pool that trades little, or where you sit out of range half the day, can pay less than a busy 0.25% pool you keep centered on price.
Picking a pool for fees, not TVL
The number that predicts your fees is not total value locked. It is fee density: the fees earned per dollar of liquidity sitting near the current price. A pool with modest liquidity and heavy organic volume can out-earn a deep pool that hardly trades, because your share of a busy market is worth more than a large share of a quiet one.
CLOBr computes fee density for you. The LP cheat sheet ranks Solana pools by fees per dollar, and each token page shows fee density in fixed windows around price, so you can compare where your capital actually earns before you deposit.
For how to size the range itself, read DLMM Strategies.
Frequently Asked Questions
How do CLMM fees work?
Every swap in a concentrated liquidity pool pays the pool's fee tier. The pool hands that fee to the liquidity providers whose price range covers the current price, split in proportion to each provider's share of the in-range liquidity. When price moves out of your range, your position stops earning until price comes back.
What are the Raydium CLMM fee tiers?
Raydium CLMM pools use fixed fee tiers of 0.01%, 0.05%, 0.25%, and 1%. Low tiers suit stable and correlated pairs that trade on tight spreads and high volume. High tiers suit volatile or long-tail pairs, where LPs need more fee income to offset impermanent loss and risk. The same pair can have more than one pool at different tiers.
Do CLMM LPs earn fees when out of range?
No. A concentrated position only earns while price sits inside its range. Out of range it collects zero fees and holds a single token until price returns. This is why range choice, not fee tier alone, decides how much you actually earn.
Are CLMM fees the same as DLMM fees?
No. A CLMM charges one fixed fee tier per pool, the same in calm and chaos. A DLMM, Meteora's design, charges a base fee plus a variable fee that rises when trading gets volatile, so LPs get paid more when providing liquidity is riskiest. The fee model is one of the main differences between the two systems.
How do I find CLMM pools that pay the most?
Compare organic trading volume against the liquidity sitting near the current price. Your fees track volume over in-range liquidity, not headline total value locked. A small pool with heavy real volume can pay better than a deep pool that barely trades. CLOBr computes this fee density per pool.
See Where Fees Actually Land
CLOBr ranks Solana pools by fees per dollar and shows liquidity depth around price, so you can place a range where volume trades instead of guessing.
Open the LP cheat sheet