> Source: [/docs/protocol/fees/fee-amm](https://tempo.xyz/developers/docs/protocol/fees/fee-amm.md) > Section: [Tempo EVM](https://tempo.xyz/developers/docs/development.md). Build on Tempo EVM: wallets and keys, transactions and fees, TIP-20 Tokens, contracts, exchange, network details, nodes, protocol specifications, and changelog. > [Documentation index](https://tempo.xyz/developers/llms.txt) · [Docs skill](https://tempo.xyz/developers/SKILL.md) > Tempo MCP: Use `search`, `find_pages`, `read_page`, and `code` at `https://mcp.tempo.xyz` for Tempo and related documentation. > If an indexed page is missing or reflects an older site, read this site’s [documentation index](https://tempo.xyz/developers/llms.txt) and Markdown pages directly. # Fee AMM overview: converting stablecoin fees The Fee AMM converts transaction fees between supported USD-denominated TIP-20 tokens. It lets a fee payer use a different token from the validator's preferred fee token. To convert the stablecoins held in an account, use the [Exchange](https://tempo.xyz/developers/docs/protocol/exchange). Fee conversion only applies to the transaction fee. ## How the Fee AMM converts stablecoin fees When a user pays fees in a stablecoin that differs from the validator's preference, the Fee AMM automatically converts the payment: * **User pays**: 1.0 of their chosen stablecoin * **Validator receives**: 0.9970 of their preferred stablecoin * **Liquidity providers earn**: 0.003 (0.3%) as fees The protocol handles conversion as part of fee processing. See the [fee lifecycle](https://tempo.xyz/developers/docs/protocol/fees/spec-fee#fee-payment) and [Fee AMM specification](https://tempo.xyz/developers/docs/protocol/fees/spec-fee-amm) for liquidity reservation, conversion, and refunds. ## Fee AMM vs. Exchange Choose the system for the amount you need to convert: | | [Exchange (DEX)](https://tempo.xyz/developers/docs/protocol/exchange) | Fee AMM | |---|---|---| | **Purpose** | User-facing stablecoin trading | Converting transaction fees into validators' preferred tokens | | **Who initiates swaps** | Users and apps | The protocol, automatically (plus arbitrageurs rebalancing) | | **Pricing** | Market-driven orderbook (price-time priority) | Fixed conversion price | | **Liquidity** | Limit and flip orders resting in the orderbook | LP deposits into per-pair fee pools | | **Contract** | Stablecoin DEX precompile (`0xdec0…0000`) | `FeeManager` precompile (`0xfeec…0000`) | | **Use it for** | Swaps, prices, orderbook depth, fills | Paying fees with a supported stablecoin | ## Learn more about fee conversion * [Use Your Stablecoin for Fees](https://tempo.xyz/developers/docs/guide/issuance/use-for-fees) — Enable users to pay fees using your stablecoin * [Fee AMM Specification](https://tempo.xyz/developers/docs/protocol/fees/spec-fee-amm) — Complete Fee AMM protocol specification * [Provide fee liquidity](https://tempo.xyz/developers/docs/guide/stablecoin-dex/managing-fee-liquidity) — Provide liquidity to enable fee token conversions