Uniswap incentivizes users to add liquidity to trading pools by rewarding providers with the fees generated when other users trade with those pools . Market making, in general, is a complex activity.
Read moreWhat are Uniswap fees?
Every time a trade is executed on Uniswap, liquidity providers (LPs) earn fees proportional to the amount of liquidity they have supplied. This fee is usually set at 0.3% but can be as low as 0.05% for stable assets, and as high as 1% for more exotic pairs .
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