The challenges
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Uniswap V3 provides better liquidity and price discovery, but presents some challenges for token launches, liquidity mining, and liquidity provision.
is difficult, because LPs have to choose a range, and rebalance it to stay within range.
LPs have substantially 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 ) means a few wallets can extract most of the incentives (eg if they provide ).
Positions on V3 are not ERC-20, and therefore cannot be used for liquidity mining.