diff --git a/src/contract.rs b/src/contract.rs
index 551ac6c..459b756 100644
--- a/src/contract.rs
+++ b/src/contract.rs
@@ -7,7 +7,7 @@ use cw2::set_contract_version;
 
 use crate::error::ContractError;
 use crate::msg::{ExecuteMsg, InstantiateMsg, QueryMsg};
-use crate::state::{State, STATE};
+use crate::state::{State, FEE_RATE, STATE};
 use astroport::asset::AssetInfo;
 use astroport::pair::{self};
 use cosmwasm_std::{Addr, Order, StdError, WasmMsg};
@@ -21,13 +21,14 @@ pub fn instantiate(
     deps: DepsMut,
     _env: Env,
     info: MessageInfo,
-    _msg: InstantiateMsg,
+    msg: InstantiateMsg,
 ) -> Result<Response, ContractError> {
     let state = State {
         owner: info.sender.clone(),
     };
     set_contract_version(deps.storage, CONTRACT_NAME, CONTRACT_VERSION)?;
     STATE.save(deps.storage, &state)?;
+    FEE_RATE.save(deps.storage, &msg.fee_rate)?;
 
     Ok(Response::new()
         .add_attribute("method", "instantiate")
@@ -77,19 +78,7 @@ fn handle_swap_reply(_deps: DepsMut, _env: Env, msg: Reply) -> StdResult<Respons
         .iter()
         .find(|e| e.key == "return_amount")
         .ok_or_else(|| StdError::generic_err("unable to find coin spent event".to_string()))?;
-    // let spender_address = coin_spent_event
-    //     .attributes
-    //     .iter()
-    //     .find(|a| a.key == "spender")
-    //     .unwrap()
-    //     .value
-    //     .clone();
-    // let coin = Coin::from_str(&spend_amount).unwrap();
-    // // transfer back to user
-    // let msg = BankMsg::Send {
-    //     to_address: spender_address,
-    //     amount: vec![coin],
-    // };
+
     Ok(Response::new())
 }
 
@@ -211,8 +200,12 @@ pub mod execute {
             asset_infos[0].to_string()
         };
 
+        // Fee deduction bank
+        let fee_rate = FEE_RATE.load(deps.storage)?;
+        let fee = amount * fee_rate as u128 / 10000;
+
         let swap_astro_msg = pair::ExecuteMsg::Swap {
-            offer_asset: Asset::native(&offer_asset, amount),
+            offer_asset: Asset::native(&offer_asset, amount - fee),
             ask_asset_info: None,
             belief_price: None,
             max_spread: Some(Decimal::percent(50)),
@@ -221,9 +214,10 @@ pub mod execute {
         let exec_cw20_mint_msg = WasmMsg::Execute {
             contract_addr: pool_address.clone().to_string(),
             msg: to_json_binary(&swap_astro_msg)?,
-            funds: coins(amount, &offer_asset),
+            funds: coins(amount - fee, &offer_asset),
         };
         let submessage = SubMsg::reply_on_success(exec_cw20_mint_msg, SWAP_REPLY_ID);
+
         let res = Response::new()
             .add_submessage(submessage)
             .add_attribute("action", "swap")
diff --git a/src/integration_tests.rs b/src/integration_tests.rs
index a4720b8..666f137 100644
--- a/src/integration_tests.rs
+++ b/src/integration_tests.rs
@@ -225,7 +225,7 @@ mod tests {
     }
     fn instantiate_my_contract(app: &mut App) -> CwTemplateContract {
         let my_contract_id = app.store_code(my_contract());
-        let msg = InstantiateMsg {};
+        let msg = InstantiateMsg { fee_rate: 5 };
         let my_contract_addr = app
             .instantiate_contract(
                 my_contract_id,
@@ -291,7 +291,7 @@ mod tests {
         let mut app = mock_app();
         let cw_template_id = app.store_code(contract_template());
         let pair_id = app.store_code(pair_contract());
-        let msg = InstantiateMsg {};
+        let msg = InstantiateMsg { fee_rate: 5 };
         let cw_template_contract_addr = app
             .instantiate_contract(
                 cw_template_id,
@@ -454,7 +454,7 @@ mod tests {
                 },
             )
             .unwrap();
-        assert_eq!(res.unwrap(), Uint128::new(999998006002));
+        assert_eq!(res.unwrap(), Uint128::new(999998006501));
 
         // let another user do swap
 
@@ -498,7 +498,7 @@ mod tests {
                 },
             )
             .unwrap();
-        assert_eq!(res.unwrap(), Uint128::new(999997009006));
+        assert_eq!(res.unwrap(), Uint128::new(999997010004));
 
         // Check current balance of user
         assert_eq!(
diff --git a/src/msg.rs b/src/msg.rs
index 3e8289b..0865f6c 100644
--- a/src/msg.rs
+++ b/src/msg.rs
@@ -2,7 +2,9 @@ use cosmwasm_schema::{cw_serde, QueryResponses};
 use cosmwasm_std::Addr;
 
 #[cw_serde]
-pub struct InstantiateMsg {}
+pub struct InstantiateMsg {
+    pub fee_rate: u64,
+}
 
 #[cw_serde]
 pub enum ExecuteMsg {
diff --git a/src/state.rs b/src/state.rs
index 8a8c22b..b805310 100644
--- a/src/state.rs
+++ b/src/state.rs
@@ -45,3 +45,5 @@ pub const POOL_CONTRACT_ADDR: Item<Addr> = Item::new("pool_contract_addr");
 pub const REGISTRY_CONTRACT_ADDR: Item<Addr> = Item::new("registry_contract_addr");
 pub const FACTORY_CONTRACT_ADDR: Item<Addr> = Item::new("factory_contract_addr");
 pub const PAIR_CONTRACT_ADDR: Item<Addr> = Item::new("pair_contract_addr");
+
+pub const FEE_RATE: Item<u64> = Item::new("fee_rate");