V3 Liquidity

Cutting-edge tick-based concentrated liquidity solution

The AMM operates similarly to Univ3, with a range of custom features that enhance efficiency and performance. Among its general performance improvements on the vanilla Univ3 codebase, some major enhancements have been implemented, such as:

Customizable Tick spacing

V3 AMM empowers users with the ability to customize tick spacing settings for each liquidity pool. This feature unlocks unparalleled flexibility by allowing tailored tick parameters. By providing the flexibility to adjust tick spacing, V3 AMM ensures optimal efficiency for each liquidity pool. This enhanced efficiency translates to improved volume and fee generation.

Directional & Dynamic Volatility Fees

V3 introduces a fee structure that adapts to the underlying market volatility, resulting in significant efficiency gains. The protocol dynamically adjusts the fees for each liquidity pool based on the prevailing volatility, enhancing fee generation and trade volume.

One of the notable aspects of this feature is the ability to set distinct volatility-based fee ranges for both buy and sell directions. As a result, each liquidity pool can offer highly tailored fee structures that cater to specific market conditions. This customization leads to increased fees and trading volume as fees more accurately reflect the market's risk profile.

During periods of low trading volume, the fees automatically adjust downwards, ensuring that users are not overburdened with high fees in quieter market conditions. Conversely, when the market experiences heightened volatility, the fees proportionally increase to account for the increased risk.

Limit Orders

A forthcoming V3 feature is the introduction of limit orders. While not yet integrated, this feature is designed to enable users to automatically close orders at a specific price without requiring an intermediary. The introduction of limit orders serves multiple purposes, including reducing price impact, enhancing market-maker strategies and creating new opportunities for traders.