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When launching a token via the Bags API, you can customize the fee structure by passing the optional bagsConfigType parameter to the Create Fee Share Config endpoint. This controls how much in trading fees the token takes at different stages of its lifecycle.

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Fee Distribution

All trading fees are split between the protocol and the creator. The split depends on whether fee compounding is enabled:
SetupProtocolCreatorCompounding
No compounding50% of fee50% of fee—
50% compounding25% of fee25% of fee50% of fee
For example, a 2% fee without compounding gives 1% to the protocol and 1% to the creator. A 1% fee with 50% compounding gives 0.5% to compounding, 0.25% to the protocol, and 0.25% to the creator.

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Fee Modes

There are three available fee modes. If you don’t specify a bagsConfigType, the Default mode is used.

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Default

Config ID: fa29606e-5e48-4c37-827f-4b03d58ee23d
StageTotal FeeProtocolCreator
Pre-migration2%1%1%
Post-migration2%1%1%
The standard fee structure. A flat 2% fee on all trades, split equally between protocol and creator. No compounding. This is the simplest option and works well for most token launches.

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Low Pre / High Post with Compounding

Config ID: d16d3585-6488-4a6c-9a6f-e6c39ca0fda3
StageTotal FeeProtocolCreatorCompounding
Pre-migration0.25%0.125%0.125%—
Post-migration1%0.25%0.25%0.5%
Lower fees during the bonding curve phase to encourage early trading volume, then a higher fee rate once the token graduates to the DAMM V2 pool. Post-migration, 50% of fees are compounded back into the pool’s liquidity, deepening the order book over time.

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High Pre / Low Post with Compounding

Config ID: a7c8e1f2-3d4b-5a6c-9e0f-1b2c3d4e5f6a
StageTotal FeeProtocolCreatorCompounding
Pre-migration1%0.5%0.5%—
Post-migration0.25%0.0625%0.0625%0.125%
Higher fees during the bonding curve phase to maximize early fee revenue, then reduced fees post-migration to encourage continued trading. Post-migration, 50% of fees are compounded back into the pool’s liquidity.

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Choosing the Right Mode

GoalRecommended Mode
Simple, consistent feesDefault (2% / 2%)
Encourage early trading, earn more post-graduationLow Pre / High Post (0.25% / 1%)
Maximize early fee revenue, encourage post-graduation volumeHigh Pre / Low Post (1% / 0.25%)
The bagsConfigType is set once when creating the fee share config and cannot be changed after the token is launched. Choose your fee structure carefully before launching.

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What is Fee Compounding?

The two non-default modes both enable 50% fee compounding after migration. This means that half of the trading fees collected post-migration are automatically reinvested into the DAMM V2 pool’s liquidity rather than being distributed. This deepens the pool over time, leading to tighter spreads and better trading conditions for the token. The remaining 50% of post-migration fees are split equally between the protocol and the creator (25% each of the total fee).