π£ Unlocking capital efficiency for LPs in 3..2..1.. π
Get 10x more trades within a tighter range than regular pools. Try out Concentrated Liquidity (v3) Pools now!
π Read more: sushi.com/blog/sushi-concentrated-liquidity-v3-is-live
πΆπ»ββοΈ UI Tutorial: sushi.com/academy/articles/concentrated-liquidity-walkthrough
Read what this means ππΌπ§΅
βΉοΈ What are Concentrated Liquidity Pools?
These pools enable Liquidity Providers (LPs) to "concentrate" liquidity within custom price intervals, optimizing capital usage & earning fees only within that range.
β¨ This allows LPs to strategically deploy capital and earn fees when asset prices fall within their chosen range, improving overall token utilization.
Why Do We Need It? π€
They address the shortcomings of regular v2 (Constant Product) pools, which often lead to capital inefficiency & slippage. Concentrated Liquidity Pools allow active LPs to focus their capital & earn fees where needed most, providing better control & returns
π οΈ How Do They Work?
LPs define custom price intervals, broken into "ticks." This allows users to earn fees within their chosen interval. Users can adjust intervals to optimize capital usage and earn fees with less capital than traditional pools.
β οΈ Any Risks?
Concentrated Liquidity Pools offer improvements for users and LPs, but come with additional risks. They are less suitable for passive LPs, as positions require active monitoring for optimal returns!
Stablecoin pairs may need less monitoring, but due diligence is essential when providing liquidity in these pools.
As always, if you have questions or comments, head over to our discord community ‡οΈ
π£οΈ discord.com/invite/NVPXN4e