In a constant-function market maker, optimal dynamic fees balance arbitrage deterrence against noise-trader attraction, and a fee that is linear in inventory and external price is a near-optimal approximation.
Optimal fees for geometric mean market makers
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Optimal Dynamic Fees in Automated Market Makers
In a constant-function market maker, optimal dynamic fees balance arbitrage deterrence against noise-trader attraction, and a fee that is linear in inventory and external price is a near-optimal approximation.