Hayden Adams, founder of Uniswap, responded to criticism over the protocol’s v4 fee switch, rejecting claims that the new charges would reduce liquidity provider earnings. Adams argued that protocol fees are added separately from swap fees and do not lower the income received by liquidity providers.
In a post on X (formerly Twitter), Adams described recent criticism of the fee activation as “FUD and misunderstanding.” He addressed the concerns after Uniswap governance approved protocol fees for selected v4 pools across several blockchains.
Adams also denied claims that Uniswap would take 25% of liquidity provider profits. Using a 30-basis-point pool as an example, he explained that a 5-basis-point protocol fee equals about 14% of total swap fees while leaving liquidity provider earnings completely unchanged.
Uniswap Compares Fees With Centralized Exchanges
Adams discussed concerns about fee levels by comparing Uniswap’s rates with centralized exchanges. He noted that many centralized platforms charge between 100 and 200 basis points per swap, while a 5-basis-point fee on a 30-basis-point pool remains significantly lower.
Uniswap Labs previously examined fee activations introduced across v2 and v3 pools. A governance update published on July 18 showed that Ethereum’s 25 largest v3 pools with enabled fees retained 98.5% of liquidity levels recorded before activation, measured in token terms.
The governance update also stated that protocol fees contributed to around 7.5 million UNI burns from December onward. The team at Uniswap Labs clarified that the data was based on previous protocol versions and does not indicate how liquidity providers on v4 may respond.
Uniswap Shares Data After v4 Fee Activation
Uniswap v4 pools include different features compared with v3, such as customised hooks, changing prices, and varied pool strategies. The company stated that governance may introduce another proposal to modify rates if the new fees impact pool activity.
According to DefiLlama data on July 29, Uniswap’s combined total value locked stood at $3.059 billion. The platform generated $852.08 million in annualized fees and $47.13 million in annualized revenue, while its combined decentralized exchanges processed $50.767 billion in trading volume over the past 30 days.
Fees generated through the new v4 system go into TokenJar contracts. Searchers can access the assets by submitting and burning UNI through the Firepit mechanism, while the system links fees from layer-2 networks to burns on Ethereum’s mainnet.
Future v4 Rollouts and Liquidity Review Plans
The approved proposal covers the first group of v4 deployments. Zora, X Layer, World Chain, Soneium, and Celo need another governance proposal because the governance contract limits the number of actions allowed in one vote. The second proposal does not have an announced date yet, while governance can later change individual pool settings, fee rules, or the policy contract linked to the system.
The upcoming review will focus on liquidity and trading volume after fees begin to be collected. Adams clarified the planned fee calculation, while future pool performance will show how liquidity providers respond to the new structure.
