Simplifying Fee Tier Selection
Having previously covered the concepts as well as practical effects of fee tier choices on LP returns, this post summarizes all the learnings into an easily accessible flow chart. Through progressively stepping through this process flow, LPs can gain a better appreciation of each of the factors that goes into choosing the best fee tier based on their personal preferences.
If in doubt, readers can always refer back to Part 1 to view the trading fee mechanism as well as the various decision factors and their corresponding risks. Additionally, the multiple real-world examples in Part 2 should enable readers to fine-tune their selected fee tier based on their risk profile.