Lama Pools LP's Unique Fee Rate

Uniswap v3 introduces multiple pools for each pair of tokens, each with a different swap fee. All pools are created by the same factory contract. The factory contract initially allows pools to be created at three fee tiers: 0.05%, 0.30%, and 1%. This means that for every single token users have to calculate and predict correctly the volatility for any given period of liquiidty provision.

This means that Liquidity providers will experience impermanent loss at price spike higher than 0.1% on a pool that has a fee rate of 0.05%. Likewise is true for all other pools where the price spike is higher than the fee rate %. This in turn makes the market less liquid by splitting all liquidity in 4 different pools of the same trading pair.

Lama Pools on the other hand has engineered a dynamic fee algorithm rate for its CLMM/DLMM . What this means is that we will only have a single pool for each pair which would make our pool more liquid. How it would work is the following: We will use an oracle to monitor and track the volatility of our own pool. During high volatile sessions the pool will automatically adjust to higher Fee Rate % which will in turn enhance the experience and returns as well as protect Liquidity Providers from impremanent loss. Likewise when volatility within the pool is low the algorhithm would automatically adjust the fee rate to reach a minimum floor of 0.01% fee tier.