What LPs Are Actually Getting Paid For on Stabull

By Jamie McCormick, Co-CMO, Stabull Labs

The 12th article in the 15 part “Deconstructing DeFi” Series.

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Over the past few weeks, the Stabull team has been reviewing non-UI trading activity flowing through our pools across all three chains we support — Base, Ethereum, and Polygon. These behaviours are equally easy to trace on each network, and we see the same or very similar execution patterns repeating across different pools, assets, and chains.

For this series, many of the concrete examples focus on Base not because it is unique, but because the acceleration in transaction volume on Base going into the New Year was what initially triggered the investigation. Once we began tracing those flows, it quickly became clear that the same dynamics are present across the rest of the protocol as well.

What we found across all three networks is that liquidity providers are not just being paid for “being there.”

They are being paid for reliability inside execution paths.

Understanding that distinction is key to understanding why non-UI volume matters, and why it often represents higher-quality yield than traditional retail-driven trading.

Liquidity as infrastructure, not inventory

In many AMMs, liquidity behaves like inventory sitting on a shelf. It waits for someone to come along and trade against it.

On Stabull, liquidity increasingly behaves like infrastructure.

It is:

embedded into automated execution flows  selected by solvers and routing engines  relied upon as a stable conversion step 

This means LPs are not just facilitating discretionary swaps. They are enabling systems to function.

When a bot, aggregator, or solver routes through a Stabull pool, it is doing so because it expects:

predictable pricing  low failure risk  consistency across market conditions 

That expectation is what LPs are compensated for.

Why non-UI volume is often better volume

Retail UI swaps tend to be:

sporadic  sentiment-driven  sensitive to incentives  highly cyclical 

Non-UI volume looks very different.

It is:

repeatable  programmatic  strategy-driven  indifferent to marketing or UX 

From an LP perspective, this matters because non-UI volume tends to:

occur more frequently  arrive in smaller, repeatable trade sizes  persist across market regimes 

That translates into steady fee accrual rather than bursts of activity followed by long quiet periods.

What LPs are being paid for, concretely

Based on the transactions we reviewed across Base, Ethereum, and Polygon, LPs are effectively being compensated for:

Execution certainty

Trades can complete atomically without reverting.  Price alignment

Oracle-anchored pricing keeps pools aligned with off-chain reference prices.  Low slippage at practical trade sizes

Especially important for automated strategies.  Composability

Pools can be dropped into multi-leg execution paths without bespoke logic. 

Every time a transaction chooses a Stabull pool instead of an alternative venue, it is making a trade-off in favour of those properties.

Fees are the reward for providing them.

The “toll booth” model revisited

As described in the previous article, liquidity provision on Stabull resembles a toll booth.

LPs are not:

lending assets  underwriting credit risk  relying on borrower repayment 

They are:

enabling transactions to pass through  charging a small, predictable toll each time 

Importantly, this toll is paid regardless of whether the end user knows Stabull exists. LPs earn fees whenever liquidity is used, not when attention is captured.

Why fee quality matters more than fee size

A single large trade can generate more fees than dozens of small ones — but it can also be unpredictable.

What we observed instead was:

many small to medium trades  routed repeatedly through the same pools  as part of ongoing strategies 

This kind of volume is less exciting to look at on a per-transaction basis, but far more valuable over time.

It compounds.

How this fits into the broader LP picture

For LPs on Stabull, yield typically comes from two sources:

Swap fees

Generated by real transaction flow and paid in liquid output currencies.  STABUL incentives

Distributed via the Liquidity Mining Program through Merkl to support early growth and attract liquidity. 

The key distinction is that swap fees reflect actual usage. Incentives help accelerate adoption, but usage is what sustains yield long-term.

As non-UI volume grows, the balance shifts naturally toward organic fees.

Why this is still early

The transactions reviewed represent a snapshot, not an endpoint.

Many execution systems:

gradually test liquidity  start with small trade sizes  increase routing only after reliability is proven 

That means today’s non-UI volume often precedes larger, more consistent flows later.

From an LP perspective, this is often the most attractive phase: when utilisation is rising, but liquidity depth has not yet caught up.

What LPs should take away

The important takeaway is not just that LPs are earning fees.

It’s why they are earning them.

Stabull LPs are being paid for:

providing stable execution infrastructure  enabling automated systems to function  sitting quietly inside the plumbing of DeFi 

As Stabull becomes more embedded in execution paths across multiple chains, LPs benefit not from hype, but from repetition.

Looking ahead

In the next article, we’ll zoom out again and look at who is actually driving this non-UI activity — breaking down the roles of bots, solvers, and aggregators, and how each one interacts with Stabull in different ways.

About the Author

Jamie McCormick is Co-Chief Marketing Officer at Stabull Finance, where he has been working for over two years on positioning the protocol within the evolving DeFi ecosystem.

He is also the founder of Bitcoin Marketing Team, established in 2014 and recognised as Europe’s oldest specialist crypto marketing agency. Over the past decade, the agency has worked with a wide range of projects across the digital asset and Web3 landscape.

Jamie first became involved in crypto in 2013 and has a long-standing interest in Bitcoin and Ethereum. Over the last two years, his focus has increasingly shifted toward understanding the mechanics of decentralised finance, particularly how on-chain infrastructure is used in practice rather than in theory.