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The common conception is that Uniswap LPs get more fees as they stay longer in the pool. I have been searching everywhere for a clear explanation of how fees work, and could not find information to confirm this conception is correct.

Take this example: Alice owns 100% of a new pool that progressively generates 10k in swap fees. Bob hops in and takes 90% of the pool, then exits right away. He'd take 9k in fees, and just 1k remaining for Alice? But if Alice had exited before Bob enters in the pool, she'd get 10k in fees. If this is correct, providing liquidity for a shorter period would entitle the LP to more fees.

Can someone clear this out?

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  • Fees awarded to LPs are based on the trade-volume rather than the actual investment-time. The more volume is being traded, the more fees accumulate in the pool (i.e., remain in the pool), and so when an LP withdraws, he/she gets a part of that.
    – goodvibration
    Commented Oct 5, 2020 at 7:18
  • So would you confirm my example above is correct?
    – Pm Rivière
    Commented Oct 5, 2020 at 7:33
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    Hi there, came across your question and decided to ask my own seeing that yours didn't get much traction. I also ended up answering it here: ethereum.stackexchange.com/a/117762/86303
    – MShakeG
    Commented Jan 1, 2022 at 21:10
  • @MShakeG legend. Answer is your thread ethereum.stackexchange.com/a/117762/86303
    – Pm Rivière
    Commented Jan 2, 2022 at 4:26

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