[Temp Check] Activate v4 Protocol Fees

Temperature Check
22

Would you mind clarifying why you’re saying that protocol fees will not save the UNI price?

One of the only positive things about the fee changes that I can see is that over time, burn pressure on UNI should support the token price over time. Doubly so, if they don’t lose LPs like you (and me)! We think that UNI acquisition is the natural remedy to the issue (or at least that’s what some would like) and would act as a sort of natural ~hedge. The changes proposed will compress implied vol (represented by LP fee income) w/o changing the realized vol of the T0 in the pool. As a result, we are effectively short volatility at a lower premium than before. This has a major impact for LPs that don’t have some kind of advantage play. Our plan was to acquire UNI at the rate of loss of our fees, thus sort of trading against the burn… I’d be interested in hearing what you think about this and why you think this might not work??? Thanks!

2 Likes
23

Biggest mistake they did so far. If I am not mistaken, Uniswap has generated 4x more fees previously from front-end fees compared to protocol fees now.
I also get that there is fear of being labeled a security from sharing front-end fees with community, but there is only a matter of time until someone comes and takes uniswap place.

Take for example 1% pools, most of the volume there is team driven, adding a 0.1% protocol fee just kills any chance of that happening. Outside of big LP’s with native/stable, that’s over 90% of the on-chain market.