UniSwap is the leader of decentralized finance and their innovations are quickly forked to many different crypto ecosystem. Their V3 update is no exception. Uniswap V3 allows liquidity providers to choose a specific range to provide liquidity, allowing them more capital efficiency and greater fees at the expense of greater impermanent loss. A variety of fee tiers and volatility strategies allow liquidity providers to employ sophisticated strategies unthinkable in traditional finance, such as a fee earning limit order. The complex of these V3 positions are such they can no longer be represented as a fungible liquidity token for the pool, but must be represented as an NFT minted when the user enters the position.
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