Provide Liquidity on Uniswap V3

How can Uniswap v2 LPs migrate liquidity to Uniswap v3?

If you own a Uniswap v2 LP position, you can migrate it to Uniswap v3 here.


What kind of v3 analysis tools will be available to LPs?

We have a lot planned in terms of better UI and tooling — impermanent loss calculators, LP portfolio metrics etc. — but we expect that the Uniswap community will also be building many tools and apps on top of V3.


Will concentrated liquidity amplify impermanent loss?

All things equal, the more narrow the range, the more impermanent loss. At the same time, V3 LPs can afford to put far less capital at risk relative to their V2 counterparts while providing the same depth and earning the same fees in useful price ranges. V3 LPs can use remaining capital to hedge their risk or increase exposure to preferred assets.


Does Uniswap v3 offer single-sided liquidity?

LPs can pursue single-sided liquidity allocation above the current spot price if they are provisioning the higher valued token or below the current spot price if they are provisioning the lesser valued token.

In the former case, the LP would effectively be selling out of their position as the asset that they provided increases in value. In the latter case, an LP would effectively be scaling into a position of the other asset as it continues to fall in price.


As an LP, I’m worried about not knowing what range to provide liquidity. Is a hybrid approach to v2 and v3 possible?

The nice thing about v3 is that it can accommodate many different types of LP strategies, including the 0-to-infinity default strategy found in v2.

A hybrid approach may involve setting a relatively wide range around the mid-price, or using a third party auto-LP service, which can manage rebalances on the LP’s behalf.


What is the purpose of representing LP positions by an NFT?

LP tokens are being replaced with an NFT (ERC-721) because the liquidity representation must contain the unique position boundary data.


How will LP NFTs integrate with other DeFi building blocks such as to allow farming?

Community members and ecosystem partners may build farming aggregators on top of v3.


How will liquidity be distributed between L1 and Optimism?

v3 is so much more capital efficient that we think it can easily serve the same market depth as v2 (or better) even if the protocol’s liquidity is fragmented across multiple networks.


How would an LP update their price range and what are the approximate network fee for modifying the bounds of a LP position?

Modifying the bounds, or updating a price range, of a position is just removing liquidity and adding liquidity.

  • Adding liquidity: ~ 100-170k

  • Removing liquidity: ~ 55-100k You can see more details here.

Will there be liquidity mining in v3?

Liquidity mining programs can be introduced at any time by Uniswap protocol governance, which is separate from and not controlled by Uniswap Labs. Any liquidity mining-related proposal must pass through the standard governance processes.


Why are there multiple pools for a pair of tokens?

This is to accommodate different fee tiers. While there is potential for multiple fee tiers to lead to a degree of liquidity fragmentation, we don’t expect this to be a significant issue as most pairs will likely have one fee tier that makes sense.


For example, stablecoin/stablecoin pairs will likely opt for the lowest fee tier, 0.05%. Governance proposals can be used to add additional fee tiers if necessary.


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