Top Cool Features of The New v3 AMM & Why No-one Is Really Talking About It Yet
Over the past few months since we the commencement of the project, we have not stopped getting inquiries on the features of v3 AMM and what to expect from the TigerSwap platform. In this article, we shall be looking at some of the cool features of the v3 AMM and also most importantly some tools and resources you might find really helpful.
While there are about 5 unique features of the new generation AMM, the most common and most discussed feature is the concentrated liquidity and capital efficiency. Lets look at some more other new features to expect but first according to the v3 whitepaper, here’s the mathematics behind the protocol:
Concentrated liquidity is liquidity allocated within a custom price range. Previously, liquidity was distributed between 0 and infinity, uniformly along the price curve.
V3 allows Liquidity Providers (LPs) to concentrate their capital on smaller price intervals. Rising and falling asset prices may exit bounds set by LPs. When this happens, the position’s liquidity is no longer active and no longer earns fees. This offers traders deeper liquidity and allows LPs to earn more with less capital investment.
Concentrated Liquidity allows the market to decide a sensible distribution of liquidity while allowing LPs to create as many positions as they see fit in their price interval.
With the new concept of multiple pools per pair of tokens, each with a different swap fee. Traditionally every pair of tokens corresponded to a single liquidity pool, each with a default fee of 0.3% for all swaps. While this approach has worked well in the past, it is likely too low for pools that trade in highly volatile tokens and is too high for relatively stable ones.
With UniSwap V3, all pools are created by the same factory contract, allowing contracts to be created at three different tiers: 0.05%, 0.3%, and 1%. This allows you to route to the pools that give you the final assets.
UniSwap V3 removes the need to track previous values of the accumulator externally. This is achieved by storing an array of cumulative sums instead of just one, making it possible to calculate TWAP within the past on a single chain call.
With the oracle upgrades, it is far easier and cheaper to create more advanced oracles with greater capabilities. This has reduced gas costs for UniSwap traders by roughly 50% compared to UniSwap V2.
Uniswap v3 AMM Calculator & Simulator:
In this article I shall be sharing with you once of the most important tool you should consider before you start using Uniswap v3 which is the liquidity calculator available here: https://www.metacrypt.org/tools/uniswap-v3-calculator-simulator/
Via this link, you can easily calculate and track fees generated from Uniswap V3 positions as well as get meaningful insights on volume, prices and investment returns including APR.
Another build for Uniswap v3 that I find applaud able is what the guys at Visor Finance are building here. What they are providing covers for active liquidity by using series of smart contracts and management infrastructure used by managers and market makers. Since they deployed the hypervisor contracts and management infrastructure in Q1 of 2021 over $20M of TVL has been deposited and managed via hypervisors.
The interesting and innovative platforms coming up on the v3 AMM are no doubt signs of the fact that the next generation AMM ushered in by Uniswap v3 might completely change the way we see decentralized finance.
At TigerSwap, we are bringing this technology to Binance Smart Chain and other Ethereum EVM network currently not supported by Uniswap, there by not only expanding the application usage and adoption but to also create an healthy ecosystem for the co-existence of both LPs & holders.
In the mean-time, team is also working on making the testnet network of the platform available for the public while other networks are being integrated on the platform at the same time.
Applications for integrations on leading crypto aggregators are ongoing at the moment alongside with grant applications amongst other activities focused and dedicated towards moving the project forward.
Also team has been focused on organic exposure and strategic placement of the project on reputable and top platforms, one of them we would like you to be aware of is the listing on DoraHacks. Please see link below:
As the project grows and more updates are available, we shall keep the $TIGERS updated via all official channels.
Once again, we say a big thank you to the community for your continuous support and donations on this project. Our team and community will be happy to assist you if you have any further issues or need anything.
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