How DAO Protocol Fees Work

Clipper adds a small spread (~10bps) on each trade, of which 100% goes to the DAO as Protocol Fees.
More precisely, this is measured by summing the positive difference between Clipper input and output on swaps, according to on-chain price oracles. This is fully verifiable on-chain, so LPs don’t need to take anyone’s word for it.
Effectively, the spread generates excess returns over and above the Daily Rebalancing Portfolio benchmark ("Benchmark Outperformance"). Note that this structure means LPs only pay fees if they actually profit. This is a big difference from other AMMs, which charge a fee on trades even If it loses money for LPs. You can track benchmark outperformance here.
DAO Protocol Fees are published by Token Terminal and are also publicly auditable on-chain.
The blog includes a thoughtful post on how to Maximize DAO Protocol Fees.