I just want to point out a few questions that I have, I hope you guys can answer them. We have analyzed the Uniswap largest pools, and most of the liquidity provided is done by a few actors, some of which are providing liquidity although they are out of range =( see:
161944 (USDC/ETH 0.3%) 9M
368120 (USDC/ETH 0.3%)10M
314029 (USDC/ETH 0.3%) 6M
259042 (USDC/ETH 0.3%) 12M
More than 20% of the pool is filled by 4 LP
360541 (USDC/ETH 1%)10M
50% of the pool is filled by one LP - Maybe good to ask him if ok - But I guess as you guys chose that pool you probably have already discussed with them. If not, that would be a mistake.
etc…
As a large Uniswap LP ([RFC] The Optimism-Uniswap Protocol Liquidity Mining Program - #20 by research), we are delighted if you put a 1/10 fee in the protocol to foster innovation, increase utility and VOLUME for the platform, we believe this is absolutely amazing, please put the fee switch on, for every pool we LP, please! We will vote for this!
My main question is “how to actively but organically increase volume on Uniswap?” Short term LM incentives are not a long-term viable solution IMO.
BMV - Bring More Volume - Why do people trade on DEX? Who trades on DEX? How do people trade on DEX? Isn’t the DEX volume mostly automated? Isn’t DEX volume mostly related to Arbitrage and MEV opportunities? Is there a competition between CEX and DEX or are they complementary and one needs the other for it to work properly ? Do CEX use DEXes? If not, why not?
I think the discussion should be centered around this rather than knowing if LP will stay or leave because of the fee switch. If fees increase 50% thanks to Fee Switch, why would LP care about a 10% tax on top of this. If volume decreases drastically because of Fee Switch, then LP might need to derisk and exit LPing even if the tax was 0.5%.
Hope that little grain of salt helps =)
Looking forward to discuss.