Uniswap and PancakeSwap Pay LPs More
Plus: Richard Heart detained in Istanbul, Ledger halts sales in seven Asian markets, and USDC becomes the EU's first significant e-money token.
gm, Defiers!
These are the biggest stories in DeFi and crypto:
- Richard Heart was detained in Istanbul
- Ledger halted sales in seven Asian markets
- The EBA named USDC a significant e-money token
- U.S. inflation rose to 3.7% in September
- Babylon proposed native BTC collateral on Aave
A liquidity provider, or LP, deposits two tokens into a decentralized exchange pool so traders can swap between them. The LP earns a share of every swap fee in that pool. Two things cut into that income. The exchange can keep part of each fee for its treasury or token holders. And when prices move on faster markets, arbitrage traders buy from the pool at its old price and keep the gap. Researchers call that second cost loss-versus-rebalancing, or LVR. Today Uniswap and PancakeSwap each changed how much of the fee pool stays with LPs. What did each change, and who pays for it?
Uniswap works on the second cost. Its own protocol still takes part of the first. In July, governance turned on protocol fees for v4 pools, and the v3 fee switch already took up to a quarter of LP fees on some tiers. In September, Uniswap Labs launched StablePair Hook, which auctions the fee on trades that restore a stablecoin peg. Uniswap says StablePair pools did $3.1 billion in volume in their first four weeks. Today it launched VolatilePair Hook on an ETH/USDC pool. The pool charges different fees for buying and selling ETH, based on recent price moves. After a sharp move, trades that push the price back pay a temporary surcharge. That surcharge returns part of the LVR to LPs.
PancakeSwap works on the first cost. Its Kitchen team proposed "The Flip", which raises the LP share of v3 and Infinity swap fees to 88%. Most EVM v3 pools pay LPs 66% to 68% today. By our arithmetic, that is 29% to 33% more fee income from the same volume. The Kitchen estimates LPs would have earned about $62 million more on 2025 volume. The plan also cuts daily CAKE emissions from 22,500 to 7,000. At today's CAKE price of $2.24, the 5.7 million CAKE no longer minted each year are worth about $12.7 million.
The two designs put the cost in different places. At PancakeSwap, traders pay the same fee tiers, and the treasury takes less. The incentive budget also shrinks, so LP pay shifts from new tokens to trading activity. At Uniswap, the protocol keeps its fee, and the trader who arrives after a price jump pays more. That trader is usually an arbitrage bot, but the surcharge applies to every swap in that direction during the block.
Both plans now need LPs to deposit more capital. PancakeSwap says the higher share could support up to 30% more liquidity in the same pools. If that capital arrives, each LP dollar earns about what it earns today, and the gain goes to traders as lower price impact. At midday today, the new Uniswap pool held about $12,600, with a 20,000 USDC reward for its first two weeks. The Flip goes to a Snapshot vote after forum feedback, with a rollout planned from November to the end of January 2027.
Read more below!
As of 20:17 UTC, Oct. 14. Data: CoinGecko, Aave, Hyperliquid. Full list
Ledger Was Hacked — Who Do You Trust With Your Keys Now?
Camila Russo talked with Pablo Sabbatella, founder of security firm Opsek, about the tampered Ledger wallets. They covered each link a buyer has to trust: the maker, the reseller, the sealed box, the device and the owner. Watch the full conversation.
Richard Heart Detained in Istanbul on Interpol Notice, Turkish Media Report
Richard Heart, the founder of HEX and PulseChain, was detained by police in Istanbul under an Interpol Red Notice, Turkish outlets NTV and Sözcü reported. Interpol's public record names Finland and lists aggravated tax fraud. A Red Notice asks police to hold a person until extradition is decided, and it does not establish guilt. A U.S. judge dismissed the SEC's civil case against Heart in 2025. Also on Wednesday, investigator Specter renewed his claim that Tornado Cash withdrawals into Heart's ProveX campaign came from earlier Heart-linked funds, a link no one has confirmed.
Ledger Asks Resellers to Halt Sales in Seven Asian Markets
Ledger asked resellers in six Southeast Asian countries and Hong Kong to stop sales and take devices off shelves while it investigates tampered wallets. The markets are Indonesia, Singapore, Thailand, the Philippines, Vietnam, Malaysia and Hong Kong. Ledger says confirmed losses remain limited to Southeast Asia and that its own direct sales channel is not compromised. The new notice sends buyers to Ledger Support, but it does not extend the move-your-funds instruction beyond CryptoBilis buyers. Ledger has not announced refunds or replacements, or said where in the supply chain the implants were added.
EBA Names USDC the EU’s First ‘Significant’ E-Money Token
The European Banking Authority classified USDC as the EU's first significant e-money token under MiCA, out of 45 notified. From Nov. 12, the EBA supervises the capital, reserves and liquidity of Circle's French issuer, and France's ACPR keeps governance. Circle must hold capital of 3% of average reserve assets and run regular liquidity stress tests. Holders get stricter oversight of redemptions, and the token still has no deposit insurance. Also on Wednesday, the bank-backed euro stablecoin venture Qivalis secured a Dutch e-money license and plans to issue in the coming months.
US Inflation Accelerates to 3.7% as Gasoline Prices Jump
U.S. inflation rose to 3.7% in September from 3.4% in August, the Bureau of Labor Statistics reported. Consumer prices rose 0.6% in the month, and a 9.1% jump in gasoline caused more than half of that increase. Core CPI, which excludes food and energy, rose 0.3% for the month, but its annual rate climbed to 2.6% from 2.4%. Shelter costs also rose faster. Bitcoin traded near $81,850 at the time of writing, down about 1.6% in 24 hours. The October report is due Nov. 10.
Babylon Advances Native Bitcoin Collateral Plan for Aave V4
Babylon Labs published an Aave V4 proposal to let users borrow stablecoins against native bitcoin that stays on Bitcoin. Depositors lock BTC in a Taproot output, and Aave sees an internal token that cannot move between users. Native redemption takes several days, so a second module would let liquidators settle in WBTC at once while permissioned arbitrageurs redeem the vaults later. Liquidations seize whole vaults. Aave's risk providers have not yet set caps or liquidation terms. A Snapshot vote comes only if the discussion reaches consensus.
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