A pool can have high trading volume while liquidity providers (LPs) earn very little in fees. There are two main reasons: the trading volume may be "inflated," or the fee rate itself is extremely low. The former is common in low-fee pools designed for wash trading, while the latter is typical of mainstream stablecoin pools.
Reason One: The Pool Fee Rate Is Extremely Low – Even High Volume Doesn't Help
High trading volume does not automatically mean high fee income, because fee income = trading volume × fee rate. If the rate is too low, even massive volume may fail to generate meaningful returns.
The "one ten‑thousandth" trap of stablecoin pools
For stablecoin pairs like USDC‑USDT, the fee rate is often only 0.01% (one ten‑thousandth) or even lower. On $1 million in trading volume, at 0.01%, the entire pool collects just $100 in fees. If the pool's liquidity is large, your share gets further diluted, leaving you with very thin earnings.
Some pools are built specifically for wash trading
In 2025, pools designed purely for wash trading emerged – for example, the NAVX‑SUI pool also had a rate as low as 0.01%, allowing users to generate trading volume at near‑zero cost. These pools show very high volume, but fee revenue is extremely sparse. Making money as an LP from such pools is extremely difficult.
| Fee tier | Fees on $1M volume | Typical pool type |
|---|---|---|
| 0.01% (1 bp) | 100 USDT | Stablecoin pairs, wash‑trading pools |
| 0.05% (5 bp) | 500 USDT | Major‑coin pairs |
| 0.30% (30 bp) | 3,000 USDT | General altcoin pairs |
Reason Two: Your Liquidity Share Is Diluted
Even if a pool's fee rate is not particularly low, your share can be diluted if the total value locked (TVL) is very large. For example, the same trading pair may have pools on both Uniswap and Curve. If many LPs pile into a high‑TVL pool, each LP's slice of the pie shrinks. Furthermore, competition among DEXs pushes down fee earnings for individual pools; research shows that as competition among similar pools intensifies, fee income for a single DEX tends to decline.
Common "High Volume, Low Yield" Scenarios
Scenario A: Uniswap V3 low‑fee pools Uniswap V3 offers multiple fee tiers for different assets. The 0.05% stablecoin pools generate high volume, but because of the extremely low rate, LP returns are usually lower than those in more volatile 0.30% or 1.00% pools.
Scenario B: Project‑subsidized wash‑trading pools Some projects set up ultra‑low‑fee pools and engage in buy‑and‑sell activity themselves to boost on‑chain volume numbers. For LPs, this kind of volume is a "false boom" – it cannot be converted into real earnings and adds to impermanent‑loss risk.
How to Check if Your Pool Falls into This Pattern
Look at the fee rate: On the DEX page, check the pool's current fee rate. If it is below 0.05% (5 bp), high volume and low earnings are perfectly normal.
Check the TVL: Use DeFi Llama or Dune Analytics to see the pool's total value locked. If the TVL is very high, your share is likely diluted.
Do the math: Take the pool's 24‑hour trading volume, multiply by the fee rate, and then multiply by your proportional share. That gives your real earnings.
If you confirm the pool's fee rate is too low and your returns are indeed disappointing, you might switch to a higher‑fee pool or choose another trading pair with stronger liquidity. Keep in mind, though, that higher‑fee pools generally involve more volatile assets, and impermanent‑loss risk will also be higher.
