Just like the 1 bp fee tier 1 originally proposed 3 years ago by Getty Hill, we propose to additionally add a 2, 3, 4 bps fee tier to Uniswap v3 on Base.
You may question why we are proposing the creation of three new fee tiers when our analysis only focused on 4 bps. There are two reasons for this. For one, Aerodrome is able to adjust fees automatically on Base. We anticipate they may respond by lowering fees below 4 bps and want Uniswap Protocol to allow LPs to move without governance intervention if this happens.
Second, we believe this analysis may be a single case study into a larger finding that the required fee for LPs on L2s may be lower than 5 bps. While Aerodrome highlights the success of a 4 bp fee tier, it’s unclear whether that’s the right market rate. It may be lower.
Lastly, we note that this change should not be blindly repeated on other chains. The community should do further research on the success or failures of this program before executing it on another chain.
Just like the 1 bp fee tier 1 originally proposed 3 years ago by Getty Hill, we propose to additionally add a 2, 3, 4 bps fee tier to Uniswap v3 on Base.
You may question why we are proposing the creation of three new fee tiers when our analysis only focused on 4 bps. There are two reasons for this. For one, Aerodrome is able to adjust fees automatically on Base. We anticipate they may respond by lowering fees below 4 bps and want Uniswap Protocol to allow LPs to move without governance intervention if this happens.
Second, we believe this analysis may be a single case study into a larger finding that the required fee for LPs on L2s may be lower than 5 bps. While Aerodrome highlights the success of a 4 bp fee tier, it’s unclear whether that’s the right market rate. It may be lower.
Lastly, we note that this change should not be blindly repeated on other chains. The community should do further research on the success or failures of this program before executing it on another chain.
The Event Horizon Community Voted to Support this Proposal ehUNI-33: EventHorizon.vote/vote/uniswap/ehUNI-33
https://gov.uniswap.org/t/rfc-proposal-to-active-2-3-4-bps-fee-tiers-on-base/24346/32
The Event Horizon Community Voted to Support this Proposal ehUNI-33: EventHorizon.vote/vote/uniswap/ehUNI-33
https://gov.uniswap.org/t/rfc-proposal-to-active-2-3-4-bps-fee-tiers-on-base/24346/32
Bit of risk of increased liquidity fragmentation. But overall I think the potential benefit is more than enough to justify activating more fee tiers.
We voted to abstain in the temperature check and will vote to abstain here as well. Most of our reasons are available on the forum. To summarize, we don't believe this initiative will be successful in gaining back our lost market share from Aerodrome because we're competing against their token incentives. We're not voting against the proposal because we don't believe it can harm the protocol, but we also don't think there is much upside in the action either, so we're not voting for it. If the DAO wants to improve LP flexibility, then we should focus on the GTM of v4.
Bit of risk of increased liquidity fragmentation. But overall I think the potential benefit is more than enough to justify activating more fee tiers.
We voted to abstain in the temperature check and will vote to abstain here as well. Most of our reasons are available on the forum. To summarize, we don't believe this initiative will be successful in gaining back our lost market share from Aerodrome because we're competing against their token incentives. We're not voting against the proposal because we don't believe it can harm the protocol, but we also don't think there is much upside in the action either, so we're not voting for it. If the DAO wants to improve LP flexibility, then we should focus on the GTM of v4.
