The base trading fee for each pool is set manually by team with the aim of maximizing profitability. The optimal setting may frequently change due to shifts in liquidity provided by competing DEXs.
Lifinity also adjusts the base trading fee based on the current volatility of the market to optimize the spreads it captures as well as make front running more difficult. Currently, the volatility is detected using an off-chain bot. Later, we plan to implement it on chain.