The fee swap did improve the “main” LP´s liquidity significantly, but the “lesser” pools suffer from it because it increases impermanent loss and thus discourages users from providing liquidity to other pools.
I think it is way too early since it has been activated for us to be able to know this effect properly. Right now native projects are being driven by their fundmentals and reputation. There is a reason why minswap pool is the highest liquidity pool on cardano right now.
I believe it has more to do with the project than the fee switch taking away from liquidity.
I don’t like your proposal, I would immediately get out of the protocol. fee switch is very new. liquidity will come in time.
Impermanent loss is solved by 80/20 pools
hi, you are not clear what is the impermanent loss, sure you have clear what it is but it is a little more complex than that. example when you are in binance CEX and you exchange USD for BTC, there you are having impermanent loss and you do not have a pool. what happens is that when you buy an asset for another one. You increase the amount of currencies (as if it were inflation) then it falls in value. even if you put 95/5 if the other currency is not attractive to buy. It will neither rise nor fall as if it were a 50/50 pool. The one with 5% will have a higher price impact when it is bought or sold, but it would quickly balance out with a swap. But the 95% pool will not suffer big changes, even if you make a big swap (the whales would not swap there unless you unbalance the prices with other pools and give you an arbitrage opportunity) that pool would be as a savings not for swapping. This would serve for stable coins and tokens.
that’s why no one will be able to buy the last bitcoin traded because it would go to infinity.
I would like to give you a better example. if you have doubts write me in the chat, I send you greetings.