Uniswap Fee Switch Cuts LP Returns by Two-Thirds
Uniswap Fee Switch Cuts LP Returns by Two-Thirds
💸 LP profits slashed
Revert Finance analyzed 8,053 ETH/stable positions on Uniswap v3 to measure the impact of the protocol's fee switch, which redirects 16-25% of LP fees to the protocol.
Key Findings:
- Median LP returns dropped from 4.5% APR to 1.5% APR
- 491 positions became unprofitable after the fee implementation
- Wide-range positions (1.8x+) maintained profitability: 9.6% to 6.3% APR
- Mid-range positions saw the steepest decline: 7.9% to 3.3% APR
- Narrow-range positions, already unprofitable, lost more
The analysis includes position-level data for verification. Full report available here
What the Uniswap fee switch actually costs LPs paragraph.com/@revertfinance…
1/ Uniswap's fee switch now keeps a sixth to a quarter of LP fees on v3. We have not seen any benchmarks of what that costs LPs, so we did them, on 8,053 ETH/stable positions. The median one nets 4.5% APR if the fee never existed, 1.5% if it ran from day one. It pushes 491 into
6/ Where that leaves each kind of LP: - Wide ranges (1.8x+) keep working: +9.6% to +6.3%. - Middle widths take the deepest cut: +7.9% to +3.3%, - Narrow was losing before the fee and loses more with it. Full analysis, plus the position-level dataset if you want to check
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