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Uniswap Founder Responds to V4 Fee Switch Controversy, Clarifies Claim of "LP Fees Being Reduced" Is a Misunderstanding

1 hours ago

Uniswap founder Hayden Adams has responded to the controversy over Uniswap v4’s fee switch, clarifying that the claim “liquidity provider (LP) fees are being reduced” is a misunderstanding. Protocol fees are additive rather than deducted, and LPs still earn 30 basis points per trade. Addressing the assertion that “the protocol takes 25% of LP profits,” he explained that for pools with a 30 basis point fee, the protocol fee is 5 basis points—accounting for roughly 14% of total transaction fees—while LPs’ own earned fees remain unchanged. Adams also noted that centralized exchanges (CEXs) charge 100 to 200 basis points per trade, making Uniswap’s 5 basis point fee at the 30 basis point tier 20 to 40 times cheaper.

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