Concentrated Liquidity (Uniswap V3) Simply Explained in 3 Minutes
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- Опубликовано: 27 сен 2024
- Concentrated Liquidity (Uniswap V3) Simply Explained in 3 Minutes
In this video, we dive into Concentrated Liquidity in Uniswap V3 in just 3 minutes.
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Uniswap V3 introduces a revolutionary concept known as Concentrated Liquidity, transforming the way liquidity providers interact with the protocol. But what exactly does this mean?
Concentrated Liquidity allows liquidity providers to strategically add liquidity for specific token pairs within a defined price range. By setting these ranges based on historical price data, providers ensure their assets are always working optimally.
As users swap between tokens within the specified range, liquidity providers earn fees for facilitating these transactions. However, if the price of one token moves outside of the set range, providers' assets are automatically converted to the less-performing asset within the range.
But fear not, liquidity providers retain the ability to withdraw their assets at any time. It's crucial to understand that when liquidity is out of range, it ceases to generate fees until it is brought back within the specified parameters.
We will simplify the complexities of Uniswap V3's Concentrated Liquidity model, empowering you to navigate the decentralized finance landscape with confidence.
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Hello. Thanks for your explanation. Could you tell me what happen when the price goes out of the range, and then return to the range?, It still get rewards?, or when your position get out of the range you get the assets, and the position is ended? Thanks.
And how to calculate my impermanent loss when im out of range? because as i can understand you dont just get 2 assets converted into 1 underperforming but you lose some % of your total value.
Si the thing is that the more you get close to the edge, more is converted to the other asset, through the range.
Nice
Glad you like it
A melhor que tem para o novo ciclo de halving de 2024.
Puede ser :)