Uniswap has revealed an overview of V3 of the DEX which is due to launch on May 5, described by Uniswap as “the most flexible and capital-efficient AMM ever designed.” V3 will also launch separately on the L2 Optimism solution.
User Capital Now Goes 4000 Times Farther
Uniswap accounts for 20% – 25% of all daily transactions on the Ethereum network, and V2 has handled $135 billion in volume in the year since its launch.
DeFi users have flocked to the DEX giant to stake their capital and earn rewards, and in May, they will be able to significantly raise their exposure with lower downside risk.
V3 introduces concentrated liquidity and multiple fee tiers, allowing liquidity providers (LPs) control over the price ranges their capital is allocated to as well as compensation rising with higher risks taken by LPs.
“By concentrating their liquidity, LPs can provide the same liquidity depth as v2 within specified price ranges while putting far less capital at risk.”
Uniswap v3’s groundbreaking new feature is Concentrated Liquidity positions
Rather than being required to allocate capital across the entire price spectrum from 0 to infinity, each LP is given full control over what price ranges they wish to provide liquidity to pic.twitter.com/AOCm340YI9
— Uniswap Labs 🦄 (@Uniswap) March 23, 2021
LPs will be able to provide capital with up to 4000x capital efficiency compared to V2, offering low-slippage trade execution superior even to centralized exchanges, according to the announcement.
Is Uniswap V3 Cheaper to Use?
With gas fees near all-time highs, retail users …
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