RichSwap has announced a change to its fee structure as it looks to tackle one of the most persistent challenges facing decentralised finance on Bitcoin’s base layer: liquidity. The update applies across all RichSwap pools and is framed as a move to attract deeper capital into the emerging Runes ecosystem.
At the centre of the update is a revised total swap fee of 1.44 percent. Under the new structure, 1.12 percent will be directed to liquidity providers, while 0.32 percent will go to the protocol itself. RichSwap says the change is designed to increase returns for those supplying liquidity, particularly in an environment where incentives on Bitcoin Layer 1 have often lagged behind those offered on other chains.
The platform positions itself differently from many DeFi venues that rely on wrapped assets, bridges, or custodial arrangements. RichSwap operates directly on Bitcoin, using atomic execution from users’ own wallets. Trades settle on Layer 1, without multisignature controls or external trust assumptions. Supporters argue this approach prioritises security and transparency, though it also comes with technical and economic constraints that other ecosystems do not face.
Liquidity has been a recurring pressure point for Runes, the protocol that enables fungible tokens on Bitcoin. Compared with smart contract platforms that have spent years building DeFi infrastructure, Runes markets remain relatively thin. This can result in higher slippage and reduced efficiency, limiting participation from larger traders and market makers. RichSwap’s updated fees are intended to address that imbalance by making liquidity provision more attractive in Bitcoin terms.
From the platform’s perspective, building directly on Bitcoin is an exercise in trade-offs. Without shortcuts such as asset wrapping or off-chain execution, incentives play a central role in encouraging participation. Higher yields for liquidity providers are meant to reflect the operational difficulty and opportunity cost of committing capital to Layer 1 markets.
The portion allocated to the protocol is described as support for the broader RichSwap community. While details on how those funds will be used have not been fully outlined, the team has emphasised its open-source and fully on-chain approach, allowing users to verify how the system operates. Transparency has become an important differentiator in a DeFi landscape shaped by past failures and opaque mechanisms.
There are, however, considerations that users and liquidity providers will weigh carefully. Higher fees can improve returns for LPs, but they also increase the cost of swaps for traders. Whether the new structure strikes the right balance will depend on market response and on whether improved liquidity leads to tighter spreads and better execution overall. As with any fee adjustment, there is a period of adaptation where behaviour may shift.
RichSwap’s update also speaks to a broader debate within the Bitcoin ecosystem. As more developers experiment with DeFi-like functionality on Layer 1, questions around scalability, user experience, and economic design are becoming harder to ignore. Some observers remain sceptical that Bitcoin can support vibrant DeFi markets without relying on secondary layers or external systems. Others see efforts like RichSwap as necessary experiments that test the limits of what is possible directly on the base chain.
For now, the fee update represents a clear statement of intent. RichSwap is signalling that liquidity on Bitcoin deserves incentives that reflect its constraints and its security model. Whether this approach succeeds will become clearer as capital responds and as Runes markets continue to mature.
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