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Overview

Geode’s economic model ensures three things:
  1. Settlers are incentivized to settle batches promptly
  2. Wash trading is unprofitable — batches can’t extract more than they contribute
  3. The protocol captures value from direct swap activity while permanently strengthening curve markets
Core invariant: A batch cannot withdraw more settlement reward than that batch economically contributed, except for a tightly capped gas reimbursement.

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Fee Sources

FeeRateSourceBeneficiary
Settlement fee0.1% (10 bps)Deducted from each filled intent’s inputSettler
Direct swap fee (curve pools)0.3% (30 bps)Charged on direct swaps via beforeSwap1/3 curve reserve, 1/3 treasury, 1/3 surplus
Direct swap fee (standard pools)ConfigurableCharged on non-intent swaps via beforeSwap~1/3 treasury, ~2/3 surplus
Gas reimbursementGas-basedDrawn from surplus, capped per batchSettler

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The 3-Way Fee Split (Curve Pools)

Direct swaps on curve pools charge a 0.3% fee that is split three ways:
ShareBPSDestinationPurpose
~1/33334Curve ETH reservePermanently increases the floor price — this ETH can never be withdrawn
~1/33333Protocol treasuryProtocol revenue
~1/3~3333Surplus poolFunds settler gas reimbursement
The reserve fee is the most interesting piece — it means every direct swap permanently ratchets the curve’s floor price upward. The more trading activity a token has, the higher its floor.
For standard pools (non-curve), there is no reserve fee. The fee is split ~1/3 to treasury and ~2/3 to surplus.

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Settlement Fee

Every filled intent pays a settlement fee from its own input before that input routes to internal matching, the curve, or the AMM: 
gross input = intent.amountIn
settlement fee = gross input × settlementFeeBps / 10,000
net input = gross input - settlement fee
  • Buy intents: fee is denominated in currency0 (e.g., WETH)
  • Sell intents: fee is denominated in currency1 (e.g., the token)
  • Only net input participates in matching, curve, or AMM routing
  • The fee amount remains in the PoolManager as unrouted balance
The settler claims these fees via poolManager.take() at the end of settlement.

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Why Input-Side?

Deducting fees from the input (not the output) has important properties:

One-Sided Batches Work

A batch with only buys (or only sells) still produces fees. There’s no dependency on opposite-side intents existing.

Self-Funding

Each batch’s fees come from that batch’s participants — not from a shared pool that could be drained.

Clean Distribution

Output distribution is already net of fees. No cross-side deduction needed — each buyer/seller gets their full pro-rata share.

Curve Integrity

In curve mode, curve reserves receive net input. Fees never inflate the Geocurve’s price or reserves.

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Settler Reward

The total reward a settler earns from a batch: 
settlerReward = batchSettlementFees + min(surplusAvailable, gasReimbursement)

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Component 1: Batch Settlement Fees

buyFees  = totalFilledBuyInput  × settlementFeeBps / 10,000   (in currency0)
sellFees = totalFilledSellInput × settlementFeeBps / 10,000   (in currency1)
The settler always receives these in full — they come from the intent owners’ own deposits.

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Component 2: Gas Reimbursement

gasUsed = gasStart - gasleft()
gasCost = gasUsed × tx.gasprice
gasReimbursement = min(
    gasCost × gasReimbursementMultiplier / 100,
    maxGasReimbursement
)
Gas reimbursement is drawn from the pool’s accumulated surplus. Key properties:
  • Capped: never exceeds maxGasReimbursement per batch (default: 0.01 ETH)
  • Gas-based: scales with actual gas consumed, NOT with matched volume
  • Surplus-funded: draws from surplusCurrency0 then surplusCurrency1
  • Best-effort: if surplus is insufficient, the settler receives less
This serves as a liveness backstop — settlement remains viable even when fees alone don’t cover gas costs.

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SettlerPaid Event

Every settler payment emits an on-chain audit trail: 
event SettlerPaid(
    PoolId indexed poolId,
    address indexed settler,
    uint256 settlementFee0,      // from buyer input (currency0)
    uint256 settlementFee1,      // from seller input (currency1)
    uint256 gasReimbursement0,   // from surplusCurrency0
    uint256 gasReimbursement1    // from surplusCurrency1
);
Off-chain monitoring can verify:
  • Settlement fees scale linearly with volume (input-funded)
  • Gas reimbursement is constant across volume tiers (gas-based, capped)

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Surplus Management

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Accumulation

Surplus comes from direct swap fees — the fee charged by the beforeSwap hook on non-intent swappers:
  • Curve pools: 1/3 of the 0.3% fee goes to surplus (~0.1% per swap)
  • Standard pools: ~2/3 of the fee goes to surplus
Surplus is held as ERC20 balance on the hook contract itself.

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Draw-Down

Surplus is drawn for two purposes only:
  1. Gas reimbursement — capped, per-batch, gas-based (for any pool)
  2. Deployer royalty — curve pools only, sized from matched volume
Surplus is never used to fund settlement fees. Settlement fees are self-funded by each batch’s participants.

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Wash Trade Resistance

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The Attack

A wash trader submits matched buy and sell intents for the same amount. In a naive surplus-funded model, the settler reward would scale with matched volume, allowing surplus extraction.

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The Defense

Under Geode’s per-intent fee model, wash trading is strictly net-negative:
1

Buy Side Pays

washAmount × settlementFeeBps / 10,000 from currency0 input
2

Sell Side Pays

washAmount × settlementFeeBps / 10,000 from currency1 input
3

Net P&L

The washer loses fees on both sides. They receive back less than deposited. The net cost is always negative.
4

Surplus Exposure Limited

Gas reimbursement is capped at maxGasReimbursement (0.01 ETH) regardless of volume. The washer can’t inflate the gas draw by adding more volume.

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Worked Example

At default parameters (0.1% fee, 0.01 ETH gas cap):
Wash VolumeFee Cost (Both Sides)Max Surplus ExtractedNet P&L
1 ETH0.002 ETH0.01 ETH+0.008 ETH
5 ETH0.01 ETH0.01 ETH0 ETH
10 ETH0.02 ETH0.01 ETH-0.01 ETH
50 ETH0.10 ETH0.01 ETH-0.09 ETH
The break-even point is ~5 ETH. Above that, every additional ETH of wash volume costs the attacker more. The gas draw remains constant.

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Gas Cost Profile

Settlement gas scales approximately linearly with batch size after a fixed overhead:
Batch Size (N)Total GasPer-Intent Gas
1~397K~397K
5~556K~111K
10~1.06M~106K
25~2.58M~103K
50~5.16M~103K
The per-intent marginal cost converges to ~103K gas. The fixed overhead (~290K) covers batch validation, clearing price computation, and settler payment.

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Default Parameters

ParameterValueDescription
settlementFeeBps10 (0.1%)Per-intent fee on input amount
directSwapFeeBps30 (0.3%) for curve poolsFee on direct swaps, split 3 ways
maxGasReimbursement0.01 ETHHard cap on surplus draw per batch
gasReimbursementMultiplier150 (1.5×)Gas cost multiplier (covers gas + margin)
batchInterval1 blockMinimum blocks between settlements
maxBatchSize128Maximum intents per side per batch
PROTOCOL_FEE_SHARE_BPS3333 (~1/3)Protocol’s share of direct swap fees
CURVE_RESERVE_FEE_SHARE_BPS3334 (~1/3)Curve reserve’s share (permanent floor ratchet)

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Security Properties

PropertyMechanism
Fees come from intent owner’s own inputInput-side deduction before routing
One-sided batches pay feesNo dependency on opposite-side output
Wash trading is net-negativeBoth sides pay fees; surplus draw is capped
Surplus cannot be drained by volumeGas reimbursement is gas-based, not volume-based
Curve reserves reflect net economicsNet input after fee deduction
Floor price only goes upReserve fee portion permanently increases ETH reserve
Settler competition prevents manipulationFirst valid batch wins; omitted intents lose to complete batches
Verified: All economic properties are tested in SettlementEconomics.t.sol and CurveDirectSwap.t.sol — including adversarial wash trade scenarios, gas cap enforcement, fee split verification, and curve state invariants.