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Hayden Adams, founder of Uniswap, took to X on July 28 to push back against criticism that the v4 fee switch hurts liquidity providers. Critics on Crypto Twitter had framed the switch as a cut to LP earnings, with some claiming the protocol now takes 25% of LP profits. Adams labelled that math "made-up" and argued the structure is additive, not subtractive: LPs earning 30bp on a swap still earn 30bp on a swap.
Why it matters
The v4 fee switch is one of the more consequential changes to the largest DEX by volume in this cycle. How LPs interpret the new economics determines whether liquidity consolidates around pools that opt into protocol fees or migrates to pairs that do not. A clear read on the math matters for capital allocators running concentrated positions across v3 and v4.
Market impact
Adams' pushback is unlikely to be the last word. LP behaviour is the next data point to watch: do pools with active protocol fees retain comparable depth to those without? Until that flows data shows up, the debate on Crypto Twitter is mostly rhetorical. v4 still captures the majority of Uniswap's daily volume, so the fee-switch question is a live one for the venue's economics, not just a niche technical argument.
Frequently asked questions
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What is the Uniswap v4 fee switch?
It is a protocol-level fee on v4 pools that sits on top of LP fees, rather than replacing them. Pool deployers can opt into a protocol fee that accrues to UNI holders or a designated recipient.
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Are LPs earning less under v4 because of the fee switch?
Hayden Adams argues no: LP fees per swap are unchanged. The protocol fee is additive, so an LP earning 30bp on a swap still earns 30bp, with the protocol fee collected separately on top.
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What is the 25% of LP profits claim Adams called "made-up math"?
It is a social-media framing that the protocol fee effectively claims a quarter of LP earnings on certain pools. Adams disputes the calculation itself, not just the framing.
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How much of Uniswap's volume runs on v4?
v4 captures the majority of Uniswap's daily trading volume, making the fee-switch design a material question for the venue's economics rather than a side feature.
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What should LP allocators watch next on v4 fees?
The key data point is whether pools that opt into protocol fees retain comparable liquidity depth and fee revenue to those that do not. Flow data, not Twitter debate, will settle the argument.
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