TL;DR

• Trading fees displayed by a DEX are not always fully distributed to LPs.

• Fee allocation mechanisms differ across protocols and pool architectures.

• This research compares fee distribution models across Aerodrome, Uniswap, and PancakeSwap using official documentation and publicly available pool configurations.

Introduction

Many liquidity providers focus on a pool's trading fee, assuming that the entire fee is distributed to LPs.
In practice, fee distribution mechanisms can differ significantly both between protocols and between different pool types within the same protocol.
The purpose of this research is to compare fee distribution mechanisms across three major DEXs:

• Aerodrome

• Uniswap

• PancakeSwap
  

This comparison does not evaluate protocol profitability and does not attempt to answer the question of which DEX is better.
LP returns depend on many factors that are outside the scope of this article, including trading volume, liquidity depth, position concentration, incentive programs, Gauge mechanisms, and market conditions.

This research focuses exclusively on the path of trading fees within each protocol: what portion remains with LPs and what portion may be redirected to a protocol treasury or ecosystem participants.

Methodology

To ensure comparability, the research focuses on fee distribution rather than on the absolute fee level of a pool.
For example, if a pool charges a 0.30% trading fee and LPs receive 0.25%, then:

• LPs receive 83.33% of collected fees;

• the protocol receives 16.67% of collected fees.

This approach allows different DEX fee models to be compared regardless of the fee tier itself.
The research is based on official protocol documentation and publicly available pool configurations.
Some values represent default protocol settings and may be changed through governance decisions or pool-specific configurations.
Therefore, the results reflect protocol configurations at the time of research.
For Aerodrome, the analysis covers LP positions without Gauge staking.

V2 Pools

PancakeSwap V2

Protocol fees are implemented as a fixed mechanism across all V2 pools.
According to the documentation:

• Protocol Fee = 0.08%

This amount is distributed as follows:

• Treasury — 0.0255%

• CAKE Buyback & Burn — 0.0575%

As a result:

• LPs receive 68%

• Protocol ecosystem receives 32%

Uniswap V2

Protocol fees are implemented as a fixed mechanism across all V2 pools.
According to the documentation:

• Protocol Fee = 0.05%

As a result:

• LPs receive 83.33%

• Protocol receives 16.67%

Aerodrome Basic Pools (V2)

The documentation does not specify a separate protocol fee for Basic Pools.
At the time of research:

• 100% of trading fees were allocated to LPs.

V3 CLMM Pools

PancakeSwap V3

Protocol fee distribution depends on both the network and the pool fee tier.
For Solana:

• Protocol share — 16%

• Treasury — 8%

• CAKE Buyback & Burn — 8%

For all other supported networks, distribution depends on the pool fee tier:

• Pool Fee 0.01% → Protocol receives 33%, of which 18% goes to Treasury and 15% to CAKE Buyback & Burn;

• Pool Fee 0.05% → Protocol receives 34%, of which 19% goes to Treasury and 15% to CAKE Buyback & Burn;

• Pool Fee 0.25% → Protocol receives 32%, of which 9% goes to Treasury and 23% to CAKE Buyback & Burn;

• Pool Fee 1.00% → Protocol receives 32%, of which 9% goes to Treasury and 23% to CAKE Buyback & Burn.

Uniswap V3

For Uniswap V3, protocol fees depend on the pool fee tier.
Observed configurations:

• Pool Fee 0.01% → Protocol receives 25%;

• Pool Fee 0.05% → Protocol receives 25%;

• Pool Fee 0.30% → Protocol receives 16.67%;

• Pool Fee 1.00% → Protocol receives 16.66%.

Since late 2025, protocol fees have been enabled for selected pools through governance decisions.
The rollout continues over time as governance expands fee activation to additional pools and networks.

Aerodrome CL

For Aerodrome Concentrated Liquidity Pools, the documentation specifies a default protocol fee of 10%.
Unlike Uniswap and PancakeSwap, these fees are distributed to veAERO voters rather than to a protocol treasury.
It is important to note that the default protocol fee is a configurable parameter and may vary between pools.

V4 / Infinity

PancakeSwap Infinity (Dynamic Fee)

For pools using Dynamic Fees:

• 100% of trading fees are allocated to LPs.

According to the current documentation, no protocol fee is applied.

PancakeSwap Infinity (Static Fee)

For pools using Static Fees:

• Protocol Fee equals 33% of LP Fee;

• Protocol Fee is capped at 0.4%.

For most pools represented in this research, the resulting distribution corresponds to approximately:

• LPs — 67%;

• Protocol — 33%.

Uniswap V4

The Uniswap V4 architecture supports protocol fees.
However, at the time of research, protocol fee collection had not been broadly activated across V4 pools.
Based on the publicly available configuration at the time of research:

• 100% of trading fees were allocated to LPs.

Complete Research Table

The table below contains the complete dataset used for the infographic and calculations.

Conclusion

The research shows that identical trading fees do not necessarily result in identical LP economics.
Practical testing remains the primary tool for evaluating the effectiveness of pools and protocols. However, understanding fee distribution mechanisms helps:

• identify opportunities more efficiently;

• interpret testing results more accurately;

• recognize protocol changes that may affect LP returns.

Key observations:

1. Pool fee size does not always equal LP revenue.

2. Different protocols use different monetization mechanisms.

3. A portion of trading fees may be directed to protocol treasuries or ecosystem participants.

4. A portion of trading fees may be used for token buyback and burn mechanisms.

5. Newer pool architectures increasingly rely on configurable fee parameters.

Sources

Uniswap

• Official Documentation

• Get Started → Concepts → Fees

• A Full List of V3 Pools Included in the Initial Rollout (GitHub)

Aerodrome

• Official Documentation

• Protocol Details → Unstaked Liquidity

PancakeSwap

• Official Documentation

• Trade → Token Swap

• Earn → Liquidity Pools

• Trade → PancakeSwap Infinity → Pool Types → Infinity CLAMM & LBAMM