How MaxFi Reduces Your Costs
Learn the five ways MaxFi saves you money compared to traditional liquidity managers.
Key Takeaways
- Zero slippage: MaxFi never swaps your tokens during rebalancing
- Zero MEV: No swaps means no front-running bots can extract value
- Zero price impact, zero swap fees, and no protocol rebalance fees
The Five Cost Savings
When a traditional liquidity manager rebalances your position, it swaps tokens. Each swap has four costs:
- Slippage: You get a worse price than the market rate
- Price impact: Large swaps move the market against you, making the price even worse
- MEV (front-running): Bots see your swap and trade ahead of you, extracting value
- Swap fees: The DEX charges a trading fee on every swap (0.05-0.30%)
On top of that, most traditional managers charge a fifth cost:
- Protocol rebalance fees: Many managers charge a fee on the principal of your entire position every time they rebalance. With 50+ rebalances per year, these fees stack up fast.
MaxFi avoids all five. Here is how.
Zero-Swap Rebalancing
MaxFi is powered by Snuggle's zero-swap rebalancing engine. When the price moves out of your range, MaxFi does not swap tokens. Instead, it:
- Removes your liquidity from the old range
- Places a new range one tick spacing away from the current price
- Deposits your tokens single-sided into that range, no swap needed
Your tokens are never sold or exchanged. They are simply repositioned.
Why This Matters
Each swap can cost 0.1-0.5% or more in slippage, price impact, and MEV combined. Traditional managers might swap 50-100 times per year. That is 5-50% in hidden annual costs eating into your returns.
With MaxFi, those costs are zero.
The IL Reduction Bonus
The biggest benefit is the IL reduction.
When a traditional manager swaps during a rebalance, it sells the token that went down and buys the token that went up. This locks in the loss. It is the worst time to trade.
MaxFi skips this swap entirely. Your tokens stay as they are. This reduces impermanent loss by roughly 50% compared to traditional methods.
The Bottom Line
Lower costs mean more of the trading fees go to you. MaxFi's approach means:
- No slippage eating your returns
- No price impact moving markets against you
- No bots front-running your rebalances
- No swap fees on every rebalance
- No protocol fees charged on your position each rebalance
- Significantly less impermanent loss
These savings compound over dozens of rebalances per year and make a real difference in your returns.
What You Learned
- Traditional rebalancing has five hidden costs: slippage, price impact, MEV, swap fees, and protocol rebalance fees
- MaxFi's zero-swap approach (powered by Snuggle) eliminates all five
- The biggest benefit is roughly 50% IL reduction from avoiding sell-low-buy-high