How Do Different Fee Tiers Accommodate Various Asset Classes (E.g. Stablecoins Vs. Volatile Assets)?
Protocols use multiple fee tiers (e.g. 0.01%, 0.05%, 0.30%, 1.00%) to match the risk profile of the asset pair.
Stablecoin pairs, which have minimal IL risk, use the lowest fee tier (e.g. 0.01%).
Highly volatile or exotic pairs, which carry high IL risk, use the highest fee tier (e.g. 1.00%) to adequately compensate LPs for the risk they are taking.
