# Haircut

When users make trades on Hummus Exchange, haircut is collected by the protocol. Haircut is a fee to support and encourage the operation of the platform. Currently haircut for stable swap is **0.01%**.

### Retention Ratio

A portion of haircut collected remains in the AMM system according to retention ratio.

Initially, the retention ratio is 100%, and all fees collected remains in the AMM. If retention ratio is set to be lower than 100%, the rest of the haircut will be distributed to liquidity providers.