Making Protocol Fees Operational: Fee options for V3

How do protocol fees work? V3 sets fees on a pool-by-pool basis, with a fee of 0 as the default. The fee may be set to 0, 4, 5, 6, 7, 8, 9, or 10. This is interpreted as one over the specified number. For example, a 100bps fee tier pool with a parameter of 5 would be a 20% protocol share of the fee, and thus would be 20bps to the protocol and 80bps to LPs. Another example is a 30bps fee tier pool with a parameter of 10 would be a 10% protocol fee and thus would be 3bps to the protocol and 27bps to LPs.

Note that inserting a protocol fee does not increase the fees paid by users.