Charm_Old
  • Charm Overview
  • Alpha Vaults
    • Overview
    • How the strategy works
    • Track Record
  • ALPHA PRO
    • Overview
    • Background
    • The challenges
      • What are projects doing now
    • The Alpha Pro solution
      • Use cases
    • How it works
    • Conclusion
      • Next steps
    • User guides
      • Strategy parameters
  • Other Info
    • Team
    • Investors
    • Social media
      • Discord
      • Twitter
      • Telegram
      • Medium
  • Links
    • Alpha Vaults
  • Previous Products
    • Charm Options (V1)
      • Key Features
        • Capital Efficiency
      • Use Cases
      • How trading works
      • How liquidity provision works
      • Trading Tutorials
        • Open a position
          • Notes
        • Close a position
        • Settlement
      • Liquidity Provision Tutorials
        • Provide liquidity
        • Withdraw liquidity
      • FAQ
    • Cube Tokens
      • How it works
      • FAQ
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  1. ALPHA PRO

The challenges

Uniswap V3 provides better liquidity and price discovery, but presents some challenges for token launches, liquidity mining, and liquidity provision.

  • Providing liquidity into V3 is difficult, because LPs have to choose a range, and rebalance it to stay within range.

  • LPs have substantially higher risk 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) means a few wallets can extract most of the incentives (eg if they provide narrow liquidity).

  • Positions on V3 are not ERC-20, and therefore standardised staking contracts cannot be used for liquidity mining.

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Last updated 3 years ago

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