Optimal Uniswap Fees

Summary Post: /uniswap-fees
Formal Statements: /LP_Wealth.pdf
Contact: Charlie Noyes

Description: Constant product markets, such as Uniswap, have become DeFi’s primary liquidity venue. However, some core questions about their fundamental properties remain unanswered. We hope that stating them concisely will catalyze exploration of these mechanics.

  1. What is the expected return of a Uniswap LP?
    Status: Solved
    Solved By: Dave White & Martin Tassy

  2. What is the optimal fee to maximize LP wealth?
    Status: Solved
    Solved By: Dave White & Martin Tassy
  3. Can a Uniswap LP’s optimal growth rate exceed a buy-and-hold portfolio’s?
    Status: Solved
    Solved By: Dave White & Martin Tassy