> For the complete documentation index, see [llms.txt](https://learn.charm.fi/charm-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://learn.charm.fi/charm-finance/alpha-pro/the-challenges.md).

# 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.
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* [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.