Aerodrome, PancakeSwap Offer Competitive Fees to Uniswap Amidst Liquidity Provider Reckoning

Uniswap's fee switch has taken a significant share of liquidity providers' (LPs) swap fees, prompting questions about the best venue for LPing. In a study published on Base, researchers measured the net earnings of identical positions across five WETH/USDC pools on Uniswap v3, Aerodrome Slipstream, and PancakeSwap v3.

The study found that Uniswap's 0.05% pool charged an average fee of 25%, while the 0.3% pool charged an average of 16.7%. In contrast, Aerodrome's dynamic fees varied between 0.006% and 0.03%, with a volume-weighted average of 0.0110%. PancakeSwap's fixed tier was significantly lower at 0.01%

The study also measured emissions, which were paid out by Aerodrome's gauge in the form of AERO tokens, while PancakeSwap's MasterChefV3 farm paid CAKE and allowed stakers to keep their fees. The results showed that the best pool for LPs varied depending on the width of the position, with different pools offering more revenue at different price ranges.

The study's findings highlight the importance of understanding the fee mechanics and emissions policies of each venue before choosing where to LP. While Uniswap's high fees may be attractive to some, the results suggest that Aerodrome's dynamic fees and PancakeSwap's staking options could offer more revenue for LPs in certain scenarios.