Merge pull request #2902 from XRPLF/transfer-fees

Clarify trading fees

Author: amarantha-k

docs/concepts/tokens/decentralized-exchange/automated-market-makers.md

@@ -100,6 +100,18 @@ Liquidity providers can vote to set the fee from 0% to 1%, in increments of 0.00
 
 Each AMM gives its liquidity providers the power to vote on its fees, in proportion to the number of LP tokens they hold. To vote, a liquidity provider sends an [AMMVote][] transaction. Whenever anyone places a new vote, the AMM recalculates its fee to be an average of the latest votes, weighted by how many LP tokens those voters hold. Up to 8 liquidity providers' votes can be counted this way; if more liquidity providers try to vote, then only the top 8 votes (by most LP tokens held) are counted. Even though liquidity providers' share of LP tokens can shift rapidly for many reasons (such as trading those tokens using [Offers](offers.md)), the trading fees are only recalculated whenever someone places a new vote (even if that vote is not one of the top 8).
 
+{% admonition type="info" name="Note" %}
+
+_Trading fees_ differ from _transfer fees_.
+
+| Differences | AMM Trading Fees | Token Transfer Fees |
+|-------------|------------------|---------------------|
+| Who sets the fee? | AMM liquidity providers. | Token issuer. |
+| When does the fee apply? | When swapping against the AMM. | Any time the token transfers accounts, except when sending or receiving _directly_ to and from the token issuer. |
+| Can fees be redeemed? | Yes, by liquidity providers when they turn in their LP tokens. | No, fees are burned. |
+
+{% /admonition %}
+
 ### Auction Slot
 
 The XRP Ledger's AMM design includes an _auction slot_. A liquidity provider can bid LP Tokens to claim the auction slot to receive a discount on the trading fee for a 24-hour period. The LP tokens that were bid are returned to the AMM.