Uniswap Founder Responds to v4 "Fee Switch" Controversy: Protocol Fee Is Additional Fee Rather Than Cutting LP Earnings

TechFlow reports that on July 29, Uniswap founder Hayden Adams responded to controversies surrounding the v4 "fee switch," stating that there are significant misunderstandings about this mechanism in the market. He stated that protocol fees are charged additionally and are not deducted from the existing earnings of liquidity providers (LPs); therefore, LPs who originally received 30 basis points in fees per transaction will not see a decline in their earnings.

Regarding the claim that "the protocol takes 25% of LP profits," Hayden Adams stated that this calculation method is invalid. Taking a 30 basis points fee tier pool as an example, the protocol fee is 5 basis points, accounting for approximately 14% of the total transaction fees, rather than a share of the LPs' original earnings.

Additionally, he pointed out that compared to the typical single transaction fees of 100 to 200 basis points on centralized exchanges, the 5 basis points protocol fee is still significantly lower, and stated that it corresponds to the deepest liquidity distribution system in the decentralized finance sector. Finally, he also mocked certain fork projects for paying excessive attention to Uniswap and criticized them for compensating LPs through token issuance mechanisms.