Multiple Fee Tiers
Understanding Multiple Fee Tiers
Note for Developers: Because Pangolin V3 allows fee adjustments, a pool’s fee tier isn’t permanently fixed after creation – it can be updated to a different rate if needed, unlike Uniswap V3’s immutable fee tier per pool.
When adding a new liquidity position in Pangolin V3, users can choose from several predefined fee tiers for that pool. Each tier is suitable for different types of pairs – lower fees for very stable pairs, higher fees for volatile pairs – to balance trader cost and LP reward.
Pangolin’s innovation is that it does not impose rigid restrictions on these tiers: the team can strategically manage and adjust fees for key pools without needing a protocol upgrade. In practice, governance or the Pangolin team may add new fee tiers or tweak fees on important pairs to remain competitive and attract liquidity.
This flexibility means essential pools can maintain attractive fee structures that quickly respond to market changes.