A Liquidity Provider (LP) fee is applied to all swaps when using the Uniswap Protocol.
The LP fee is taken from the input token.
The liquidity provider fees are distributed to liquidity providers as a reward for supplying tokens to the liquidity pool.
The liquidity provider fee is paid proportionally to all liquidity providers who have an active liquidity position. Liquidity providers who have a position outside of the price range at that moment will not earn fees.
Liquidity provider fees are paid entirely to the liquidity providers. Uniswap Labs does not receive these fees.