{
  "$schema": "https://degreesofsatoshi.com/encyclopedia/schemas/article-v1.json",
  "schemaVersion": "1.0.0",
  "id": "collecting-lp-fees",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/collecting-lp-fees/",
  "collection": "defi",
  "title": "Collecting LP fees: claiming earnings versus increasing a position",
  "description": "Distinguish uncollected Uniswap v3 fees from active liquidity, and understand the extra work needed for reinvestment.",
  "aliases": [
    "do Uniswap fees compound automatically",
    "claim Uniswap v3 trading fees"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T19:18:00.092Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "In standard Uniswap v3 positions, earned fees accumulate as claimable token balances and are collected separately. Collecting them transfers the owed tokens; it does not automatically increase the position’s active liquidity. Reinvestment requires an additional liquidity action, possibly with a swap to obtain the needed asset mix.",
    "claimId": "collecting-lp-fees-quick-answer",
    "sourceIds": [
      "x425-defi-uni-fees",
      "x425-defi-uni-collect"
    ]
  },
  "keyFacts": [
    {
      "label": "Separate balance",
      "value": "v3 fees are claimable separately from position liquidity.",
      "sourceIds": [
        "x425-defi-uni-fees"
      ],
      "id": "separate-balance",
      "claimId": "collecting-lp-fees-fact-separate-balance"
    },
    {
      "label": "Collection",
      "value": "The position-manager collect flow specifies recipient and token amount limits.",
      "sourceIds": [
        "x425-defi-uni-collect"
      ],
      "id": "collection",
      "claimId": "collecting-lp-fees-fact-collection"
    },
    {
      "label": "Contrast",
      "value": "v2 trading fees enter reserves, so its accounting differs.",
      "sourceIds": [
        "x425-defi-uni-fees"
      ],
      "id": "contrast",
      "claimId": "collecting-lp-fees-fact-contrast"
    }
  ],
  "prerequisites": [
    "liquidity-provider-positions"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "Follow the balances",
      "sourceIds": [
        "x425-defi-uni-collect",
        "x425-defi-uni-fees"
      ],
      "paragraphs": [
        "Suppose a v3 position has earned 2 A and 5 B. Collecting those amounts moves them to the selected recipient. If no liquidity-increase action follows, the existing position’s liquidity has not grown merely because the wallet received fees.",
        "A management vault may automate collection and reinvestment. That automation belongs to the wrapper’s strategy and fees, not to every bare v3 position."
      ]
    },
    {
      "id": "mix",
      "heading": "Reinvesting requires the right amounts",
      "sourceIds": [
        "x425-defi-uni-range",
        "x425-defi-uni-fees"
      ],
      "paragraphs": [
        "An in-range position typically needs both assets in a price-dependent ratio. Collected fees need not match that ratio. A reinvestment workflow may therefore swap part of the proceeds, introducing execution cost and price exposure before adding liquidity.",
        "An out-of-range position has different inventory requirements and earns no new trading fees while inactive. Reinvesting does not itself move the selected range."
      ]
    },
    {
      "id": "net",
      "heading": "Measure after costs",
      "sourceIds": [
        "x425-defi-eth-gas",
        "x425-defi-uni-collect"
      ],
      "paragraphs": [
        "For a hypothetical collection worth 6 valuation units with a network cost of 2, the cost consumes one-third of the collected value before any reinvestment transaction. This is arithmetic, not a recommended collection schedule. Track costs in the same unit and keep fee claims separate from total position return."
      ]
    }
  ],
  "faq": [
    {
      "question": "Must I remove all liquidity to collect fees?",
      "answer": "No. The documented v3 collect flow collects owed fees while retaining the position. Removing liquidity is a separate operation.",
      "sourceIds": [
        "x425-defi-uni-collect",
        "x425-defi-uni-remove"
      ]
    }
  ],
  "claims": [
    {
      "id": "collecting-lp-fees-quick-answer",
      "articleSlug": "collecting-lp-fees",
      "statement": "In standard Uniswap v3 positions, earned fees accumulate as claimable token balances and are collected separately. Collecting them transfers the owed tokens; it does not automatically increase the position’s active liquidity. Reinvestment requires an additional liquidity action, possibly with a swap to obtain the needed asset mix.",
      "sourceIds": [
        "source-37357b0a11d2e087",
        "source-c42fa9f513123ad5"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-37357b0a11d2e087",
          "locator": "Swap fees; Pool fees tiers; Protocol fees"
        },
        {
          "sourceId": "source-c42fa9f513123ad5",
          "locator": "Collecting fees; collect"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked position-manager collect method and fee-growth claim versus principal; v3 collecting fees does not by itself compound liquidity."
        ]
      }
    },
    {
      "id": "collecting-lp-fees-fact-separate-balance",
      "articleSlug": "collecting-lp-fees",
      "statement": "Separate balance: v3 fees are claimable separately from position liquidity.",
      "sourceIds": [
        "source-37357b0a11d2e087"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-37357b0a11d2e087",
          "locator": "Swap fees; Pool fees tiers; Protocol fees"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked position-manager collect method and fee-growth claim versus principal; v3 collecting fees does not by itself compound liquidity."
        ]
      }
    },
    {
      "id": "collecting-lp-fees-fact-collection",
      "articleSlug": "collecting-lp-fees",
      "statement": "Collection: The position-manager collect flow specifies recipient and token amount limits.",
      "sourceIds": [
        "source-c42fa9f513123ad5"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-c42fa9f513123ad5",
          "locator": "Collecting fees; collect"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked position-manager collect method and fee-growth claim versus principal; v3 collecting fees does not by itself compound liquidity."
        ]
      }
    },
    {
      "id": "collecting-lp-fees-fact-contrast",
      "articleSlug": "collecting-lp-fees",
      "statement": "Contrast: v2 trading fees enter reserves, so its accounting differs.",
      "sourceIds": [
        "source-37357b0a11d2e087"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-37357b0a11d2e087",
          "locator": "Swap fees; Pool fees tiers; Protocol fees"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked position-manager collect method and fee-growth claim versus principal; v3 collecting fees does not by itself compound liquidity."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "x425-defi-uni-fees",
      "label": "Fees",
      "publisher": "Uniswap",
      "url": "https://docs.uniswap.org/concepts/protocol/fees",
      "locator": "Swap fees; Pool fees tiers; Protocol fees",
      "note": "Separates liquidity-provider and protocol accounting; no universal live fee schedule asserted.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:19.509Z",
      "contentSha256": "a31d3a8fb469aa7ed619574fd4fb9ae53ed6f2eabd999c66fd86388d014217eb",
      "recordId": "source-37357b0a11d2e087"
    },
    {
      "id": "x425-defi-uni-collect",
      "label": "Collecting Fees",
      "publisher": "Uniswap",
      "url": "https://docs.uniswap.org/contracts/v3/guides/providing-liquidity/collect-fees",
      "locator": "Collecting fees; collect",
      "note": "v3 position fee collection is a separate action.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:19.524Z",
      "contentSha256": "b6fd0c267f34f7a17e09f6e14f65f79e3cf3ba0a01d3b5091cd6c277a71199c7",
      "recordId": "source-c42fa9f513123ad5"
    },
    {
      "id": "x425-defi-uni-range",
      "label": "Concentrated Liquidity",
      "publisher": "Uniswap",
      "url": "https://docs.uniswap.org/concepts/protocol/concentrated-liquidity",
      "locator": "Active liquidity; ticks",
      "note": "Active range, inventory changes and fee earning.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:19.537Z",
      "contentSha256": "895e660a97de0f51f8d13a973cc1b11bec89cbbd156cd87ff09685dc7afddccb",
      "recordId": "source-30d257b4fb4b7c1f"
    },
    {
      "id": "x425-defi-eth-gas",
      "label": "Gas and fees",
      "publisher": "ethereum.org",
      "url": "https://ethereum.org/en/developers/docs/gas/",
      "locator": "Gas; transaction fees; failed transactions",
      "note": "Network resource cost separately from swap fees.",
      "version": "Documentation retrieved 2026-10-02",
      "checkedAt": "2026-10-02T18:53:23.863Z",
      "contentSha256": "566e61b7dce594a477ef28bab1f5a23279feb4f782e2838623fc7491c9daec66",
      "recordId": "source-5cadd0da692ffaa8"
    },
    {
      "id": "x425-defi-uni-remove",
      "label": "Decreasing Liquidity",
      "publisher": "Uniswap",
      "url": "https://docs.uniswap.org/contracts/v3/guides/providing-liquidity/decrease-liquidity",
      "locator": "Decrease liquidity; collect",
      "note": "v3 removal and collection flow.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:19.739Z",
      "contentSha256": "3ce9898b03e508ca8f8aa0000b09e23067dcfee1c1d7fb218c4c10643f2fdbf1",
      "recordId": "source-bbbd51458d1629f3"
    }
  ],
  "related": {
    "articles": [
      "remove-liquidity-vs-sell",
      "out-of-range-liquidity",
      "apr-vs-apy"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and separate automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Collecting LP fees: claiming earnings versus increasing a position.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/collecting-lp-fees/"
}