I understand liquidity pools well. I've actually set up pool and pool rewards up on Hive Engine. The problem I'm not understanding is that on Hive Engine pools and pool rewards are different functions. If you have a pool it doesn't automatically have rewards attached to it. You have to either create an LP Pool Rewards contract or a distribution contract to feed rewards into it. Both of those you then have to define the number of periods or intervals of how rewards are distributed. If a pool, let's say BEE:LEO, doesn't have rewards turned on then how will these new fees determine their distribution schedule back to the liquidity providers? I'm assuming it will be daily but what about pools that have 365 day intervals? Will they automatically move to daily disbursements of these new fees or follow the distribution schedule for that pool's rewards schedule?
After rereading your comment you seem to think the fees will just be added to your staked liquidity that's in the pool. If that's the case and it doesn't operate like other rewards options on Hive Engine how do they determine the timing for fees to be added to distribution?
I can't say for certain but I think the fees are going to be added to existing liquidity at the same exact time the swap is made, so there aren't any extra transactions being made that would create the need for daily distribution/payout times, and it would also be impossible for people to game it with those silly 5 minute in-out shenanigans. Of course, I'm just drawing this conclusion from a few implications, and the way it seems that every other idea has so many problems.
example:
I swap 100 BEE into said BEE:LEO pool
0.25 BEE is immediately added to existing liquidity, without affecting anyone's %
I get 99.75 BEE worth of LEO as a result, and the liquidity providers gained a little.
Does this help clarify how the extra transactions can be avoided?
I think this is the only way that really makes sense, right?