# Capital Efficiency

Capital Efficiency is measured as the improvements in liquidity versus Uniswap V2, Sushiswap V2, or a full-range position on Uniswap V3.

From the 15 vaults that was tested by Charm on Mainnet and L2 over 5 months, it achieved on average:

{% hint style="success" %}
[22x](https://docs.google.com/spreadsheets/d/1xDOWx2MGX6M3BlEIclFd-MpY6EgVkxyTPpK_2X0tao0/edit#gid=212561072) better capital efficiency without increasing the risk of financial loss.
{% endhint %}

The following chart illustrates the above using the[ WETH/UNI vault ](https://charm-alpha.vercel.app/vault/0x57ebbbf7c8c412ce63d79aaac3624557bed2a08e-42161)on Polygon:

<figure><img src="https://3306594273-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FncWpbfiN022KvH5AGrQq%2Fuploads%2FhxHsPGJOjlgq84Qey4Ra%2FScreenshot%202023-07-06%20at%2006.59.55.png?alt=media&#x26;token=28672f87-10ef-44c1-a4e8-42bce6e3e5bd" alt=""><figcaption><p>The WETH/UNI vault on Polygon achieved up to 164x Capital Efficiency over 5 months</p></figcaption></figure>

<figure><img src="https://3306594273-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FncWpbfiN022KvH5AGrQq%2Fuploads%2FisGvxss1XGuGFlIx1Wcy%2FScreenshot%202023-07-06%20at%2007.02.04.png?alt=media&#x26;token=3ad16aed-8f23-4997-b330-dfaef6c707d9" alt=""><figcaption><p>The WETH/UNI vault on Polygon generated Net Returns of 11.4% over 5 months, for an Net APY of around 30.7%</p></figcaption></figure>

What the above means in practice is that:

* For same same amount of deposits, projects using Alpha Vaults can reduce slippage by up to 164x, and increase trade size by 164x.
* To get the same level of slippage and trade size as Uniswap V2, Sushiswap V2, or a full-range position on Uniswap V3, projects using Alpha Vaults will need 164x less liquidity. For example, $1000 deposited into Uniswap V2/Sushiwap/full-range will only need $6.09 to achieve the same outcome.
* The above can be achieved without financial loss, because the LP's Net APY is 30.7% over 5 months.

[Aggregated data](https://docs.google.com/spreadsheets/d/1xDOWx2MGX6M3BlEIclFd-MpY6EgVkxyTPpK_2X0tao0/edit#gid=212561072) across all the vaults shows that over 5 months, the average capital efficiency improvement was 22x, and the average Net APY was 10.31%.