How Does the Fee Tier (E.g. 0.3% Vs 0.05%) of a Pool Affect the Net Profitability against IL?

A higher fee tier (e.g. 0.3%) generates more revenue per trade, which is better for offsetting impermanent loss, especially in volatile pairs.

However, a higher fee can also deter trading volume, as arbitrageurs and normal traders prefer lower costs. A lower fee tier (e.g.

0.05%) attracts more volume but provides less revenue per trade. The optimal fee tier balances high volume with sufficient revenue to beat IL.