Uniswap founder Hayden Adams responded on X to criticism around the v4 fee switch, arguing that claims about reduced LP income are based on a misunderstanding of how the protocol fee works. He said the protocol fee is added on top of the trading fee rather than deducted from what liquidity providers already earn. In his example, LPs in a 30 basis point pool still receive 30 basis points per trade.
Adams also pushed back on the claim that the protocol is taking 25% of LP profits. He said that in a 30 basis point pool, the protocol fee is 5 basis points, or about 14% of the total trading fee, while LP earnings remain unchanged. He compared that charge with centralized exchanges that he said collect 100 to 200 basis points per trade, arguing Uniswap’s 5 basis point fee at the 30 basis point tier is 20 to 40 times cheaper. Adams also criticized some forked projects for charging 100% of trading fees while using uneven token inflation set by governance votes to “compensate” LPs.
Uniswap founder Hayden Adams said on X that criticism over the v4 fee switch is based on a misunderstanding of the protocol’s fee design.
According to Adams, the protocol fee is additive rather than deducted from liquidity provider, or LP, earnings. In a 30 basis point pool, LPs still earn 30 basis points on each trade, he said.
He also addressed claims that the protocol is taking 25% of LP profits. Adams said the protocol fee in a 30 basis point pool is 5 basis points, which is about 14% of the total trading fee, while LPs are not losing any of the income they would otherwise receive.
Adams added that centralized exchanges typically charge 100 to 200 basis points per trade. By that comparison, Uniswap’s 5 basis point fee at the 30 basis point tier is 20 to 40 times cheaper, he said.
He also criticized some forked projects, saying they charge 100% of trading fees and then use uneven inflation set through token voting to “compensate” LPs.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
