[Consensus Check] "Fee Switch" Pilot

Heya @BP333, as this is a pilot, we are somewhat lucky that there is existing academic research on AMMs and the effect of a fee switch.

  1. Some metrics that could be tested

Referencing this post by @rfritsch and his paper on The Economics of Automatic Market Makers, there are some parameters that @teemulau highlighted in the post.
Specifically the "sticky volumes s1 , s2 , and the LPs acceptable difference d ".

This is as @guil-lambert has suggested and this is key as it allows one to have some data to work with at last.

An interesting proposition is that the DAI-ETH pool 0.05% pool has a 24H volume of $27.72m (highest volume amongst all DAI pools) and a TVL of $14M while the DAI-ETH pool 0.3% has a 24H volume of $6.41m and a TVL of $43M. As the fee will come from trading fees, it makes sense to explore a pool with a higher volume and lower TVL to see its effect. Furthermore the total TVL of DAI on Uniswap is $935M therefore this can help control potentially averse impacts of the pilot.

  1. How?

I’d love to see @guil-lambert and @Leighton 's report on this experiment but tbh you could just use a these Dune dashboards (or make your own) and Uniswap’s own charting (here’s the DAI-ETH one!).

I’d imagine that it’s within the mandate of the upcoming Uniswap Foundation to explore R&D on the fee switch which would probably be shouldered by whoever is the Protocol Lead. Furthermore, @devinwalsh has also mentioned that it is within the Foundation’s remit - so I’m confident this pilot won’t simply be executed and left to the wind!

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