# 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](/~/changes/Pe3DAbObJ7vk3hibsPW0/introduction/how-lp-returns-work.md) 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](https://clipper.exchange/data/benchmark). DAO Protocol Fees are published by [Token Terminal](https://tokenterminal.com/terminal/projects/clipper/financial-statement) and are also publicly auditable [on-chain](https://etherscan.io/address/0xD8Cc0304de58fCE5147796606Db14500d94b5EF2?ref=blog.clipper.exchange). The blog includes a thoughtful post on [how to Maximize DAO Protocol Fees](https://blog.clipper.exchange/dao-protocol-fees/). --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.clipper.exchange/~/changes/Pe3DAbObJ7vk3hibsPW0/introduction/how-dao-protocol-fees-work.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.