# The challenges {% hint style="warning" %} Uniswap V3 provides better liquidity and price discovery, but presents some challenges for token launches, liquidity mining, and liquidity provision. {% endhint %} * [Providing liquidity into V3](https://help.uniswap.org/en/articles/5391541-provide-liquidity-on-uniswap-v3) is difficult, because LPs have to choose a range, and rebalance it to stay within range. * LPs have substantially [higher risk](https://medium.com/auditless/impermanent-loss-in-uniswap-v3-6c7161d3b445) of impermanent losses (IL) on V3, compared to V2. * Tokens have no liquidity if they are traded outside a range. * Directly incentivising a V3 pool (eg using the [V3 staker](https://github.com/Uniswap/v3-staker)) means a few wallets can extract most of the incentives (eg if they provide [narrow liquidity](https://medium.com/@revert_finance/onetickdao-eth-and-the-narrow-rangers-f9a376f7f0c9)). * Positions on V3 are not ERC-20, and therefore [standardised staking contracts](https://github.com/Synthetixio/synthetix/blob/develop/contracts/StakingRewards.sol) cannot be used for liquidity mining. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://learn.charm.fi/charm-finance/alpha-pro/the-challenges.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.