> For the complete documentation index, see [llms.txt](https://docs.liquidex.sh/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.liquidex.sh/protocol/fees-and-yield-generation.md).

# Fees & Yield Generation

Liquidex generates yield by providing liquidity — and it does so in a clean, capital-efficient way.

***

## Value accrues to NAV

Swap fees generated by the underlying **Uniswap V3** liquidity pools accrue **directly into the Net Asset Value (NAV)** of the vault. Because fees increase the vault's NAV while the number of shares stays the same:

{% hint style="success" %}
**The price of the index share token naturally rises over time.**
{% endhint %}

### The self-reinforcing cycle

{% stepper %}
{% step %}

### More trading activity

Activity in the underlying pools drives trading volume.
{% endstep %}

{% step %}

### More swap fees

Higher volume generates more swap fees.
{% endstep %}

{% step %}

### Fees flow to NAV

Swap fees accrue directly into the vault's net asset value.
{% endstep %}

{% step %}

### Your value rises

Your share value increases automatically — nothing to do.
{% endstep %}
{% endstepper %}

***

## No reward chasing

Liquidex deliberately strips away the complexity that plagues typical DeFi yield:

| Complexity you DON'T deal with   | Liquidex                           |
| -------------------------------- | ---------------------------------- |
| Separate reward streams to claim | None                               |
| Protocol cuts eating your yield  | None (configurable, defaults to 0) |
| Complex WETH conversions         | None                               |

{% hint style="success" %}
**Your yield is reflected directly in the value of your position.** Just hold your index shares and let the protocol work.
{% endhint %}


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## 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, and the optional `goal` query parameter:

```
GET https://docs.liquidex.sh/protocol/fees-and-yield-generation.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

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.