It’s super simple – the fees/reserves ratio for 0.05% pools over the past month have consistently been about 50% higher for liquidity providers in USDC/ETH, WBTC/ETH, and DAI/ETH than the fees/reserves ratio for the 0.3% version of the same pools.
Obviously, any Uniswap user would rather pay 0.05% instead of a 0.3% fee, but a month ago these pools had very low liquidity and resulted in a major price impact for large swaps. Now they’ve grown to about 1/4 of the original 0.3% pools TVL and more and more whales are starting to use them.
As a result, the daily traded volumes for 0.05% pairs are TWICE higher than the traded volumes for 0.3% pairs and they’re still climbing. Check out the volumes & TVL on Uniswap analytics: [ETH/USDC 0.05%](https://info.uniswap.org/#/pools/0x88e6a0c2ddd26feeb64f039a2c41296fcb3f5640)
At the same time, volume & total generated fees in 0.3% pairs have been in decline for a month: [Uniswap Analytics ETH/USDC 0.3%](https://info.uniswap.org/#/pools/0x8ad599c3a0ff1de082011efddc58f1908eb6e6d8)
Here are some stats regarding the profits you can expect in **0.05%** vs 0.3%:
||TVL|24H fees|Profit / 1MM invested|
In my opinion, a major reason why this easy to take advantage of inefficiency has stayed for so long is because, as far as I know, many dashboards (APY vision & competitors) do not include the 0.05% pools in their calculations.