I would suggest turning on the fee switch and have higher fee for higher charging pools, so if 1% then it will be 0.1% for the pool, if 0.3% it will be 0.05% if 0.05% it will be 0.01%.
The reason to turn on the fee switch now is that v3 given a highly competitive position for uniswap, now for a 0.05% fee, uniswap will still be at the same position.
This can provide incentives for UNI holders including developers and investor to gain value for their work and capital and not just be a free protocol all the time. It is also better to turn on as v3 is just released and if the fee switch is turn on as a changes for v2 → v3, it will make sense and build habit for future LP providers.
For fees gain from v2 and v3 protocols, it will be best to just hold all fees and if possible create a function for UNI to be burned and releases the portion of tokens from the treasury, or to be later determine by UNI holders to do buy back from public market.
This create a situation where UNI start becoming an index token for all tokens, and if small tokens such as SHIB become popular UNI holders will earn some part of its gain, and it is also costly to sell small tokens when it is not yet valuable. Becoming an index token can also help the UNI value to be “Up only” if the crypto market is growing.
It is also important to consider how we can launch an on chain voting for it to happen.