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manage protocol fee globally #64

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banteg opened this issue Feb 25, 2024 · 0 comments
Open

manage protocol fee globally #64

banteg opened this issue Feb 25, 2024 · 0 comments

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@banteg
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banteg commented Feb 25, 2024

in uniswap v2 a global protocol fee is controlled from the factory, which is a sound design.

in the current design of v3 factory owner setFeeProtocol needs to go through governance for each pool. this results in a very cumbersome situation in case uni holders decide to turn on a global fee switch, since a governance proposal can only contain 10 actions.

unlike v2 pools, where protocol fee is fixed at 1/6th, v3 pools allow to set the fee ranging from 1/10th to 1/4th, or even different fees for the pool constituents.

a likely outcome is the community will come up with some global fee value applicable to all pools instead of micromanaging each of them. in this case it would be reasonable to set a global protocol fee in the factory owner and then open up V3FactoryOwner.setFeeProtocol to enable or update the fees for any pool. interested parties would then run it through all the pools that yield any significant fees.

one possible edge case is reducing the fees after they have been set high. in this case a rational actor is not interested in updating the values for the pools, and a manual update might be needed from an entity like uniswap foundation.

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