Manual mode (LP only)

  1. Set a range

When setting the range, you may either use four presets or enter the minimum and maximum prices according to your strategy. The smaller the range, the higher the yield, but there is also a greater risk of impermanent loss When deciding on a price range, it's important to think about how much you expect prices to change during the time that you're holding your position. You'll also need to think about how much time and effort you're willing to put into managing your position as market conditions change, as well as the costs involved in making those changes

If the price of the assets you're providing liquidity for goes outside of the range you've specified, then your position will become focused on one asset or the other. You won't earn any trading fees until the price returns to within your specified range

Please note that the price you enter will be rounded to the nearest tick. It is not necessary to enter a round number, as this is a characteristic of how ticks function

  1. Input amounts

Input the amount in one box, and the other box will automatically display the corresponding amount. The ratio between the two amounts depends on your price range relative to the market price. If your price range is closer to one side of the market price, you will provide more of that asset. If you click the Full range button, you can provide liquidity across the full range, as in V2

Liquidity providers have the option to allocate liquidity on one side of the market, either above or below the current spot price, depending on whether they are provisioning the token with a higher or lower value

  1. Approve and Add liquidity

To proceed with adding liquidity, start by granting approval. (This is solely necessary for the initial liquidity provision involving a token)

Following approval in your wallet, proceed to click on Add liquidity, review the provided details, and then click Add liquidity once more to execute the transaction from your wallet

  1. Earn and manage

Your assets are now actively contributing liquidity and accruing trading fees and market maker rewards (depending on whether your position pair is incentivized through Merkl)

You can oversee and monitor your positions by clicking on View existing positions after successfully providing liquidity or navigating to the Earn tab, then selecting Positions and finally choosing LP V3.

  1. Unbind/add liquidity and harvest

On the V3 position management panel, you can view your position data, pending earned fees and incentives. You can also access the following features:

  • Market maker rewards: harvest your pending incentives (It will only appear on the interface once you have pending rewards to harvest)

  • Unbind: withdraw liquidity

  • Add: add more liquidity to your position

  • Harvest: harvest your pending rewards

When you claim your Market Maker incentives, all your pending rewards from every Camelot pool will be automatically collected for you

Note that your pending market maker rewards may appear on the positions page up to 6 hours after your deposit and it may even take longer depending on the size of your position

What does the Burn Position button signify when unwrapping V3 LP?

The Burn position feature allows you to entirely liquidate your V3 position. Not burning position when closing can be useful if you intend to add liquidity again in the future using the same parameters. If you decide not to burn a position, it will remain empty and available for a future liquidity deposit. If you burn it you will get back the assets that you originally paired and the position will be burned

Scenario example: ETH/USDC pool | range 2000-2500

  1. You've added 1 $ETH and 2250 $USDC to the pool. The current price of $ETH is $2250. Your liquidity is active and earning fees

  2. Over the next few days, the price of $ETH increases to $2400, remaining within your specified range. Your liquidity continues to be active, and you keep earning fees

  3. The price of $ETH further rises to $2600, now outside your range. Your liquidity becomes inactive, and you stop earning fees. The ETH/USDC ratio in your position has changed due to trades happening within the range; you now have more $USDC and less $ETH in your position

  4. After a week, the price of $ETH falls back to 2300 USDC, which is within your range again. Your liquidity becomes active

  5. and you resume earning fees

  6. After a month, you decide to remove your liquidity from the pool. You withdraw your position, which now consists of 0.91 ETH and 2555 USDC due to trades and fees collected during the time your liquidity was active. The composition of your assets has changed, but the overall value has increased due to the fees earned

Single-sided liquidity provision

Single-sided liquidity feature in V3 allows liquidity providers to deposit a single asset instead of both assets in a trading pair. This feature is intended to give liquidity providers more flexibility and reduce the risk associated with providing liquidity.

Here's an example to help illustrate single-sided liquidity provision:

  1. Let's assume that Galahad have 0.01 ETH and wants to provide single-sided liquidity on V3 within the price range of 2169-2416 USD for each ETH

  2. Currently, the price of ETH is $1856.3, which is outside of your chosen price range ($2169-$2416). This means that Galahad's provided liquidity will not be active at the current price and will not start earning fees until the price of ETH enters your specified range

  3. If the price of ETH were to increase and enter the $2169-2416 range, Galahad's 0.01 ETH would then be used as single-sided liquidity in the pool. Galahad would start earning fees from the trading activity involving ETH within this price range. If the price of ETH were to fall or rise beyond your specified range, Galahad's liquidity would once again become inactive and stop earning fees

Key points to keep in mind about single-sided liquidity provision in V3:

  • Single-sided liquidity providing allows liquidity providers to deposit only one asset instead of both assets in a trading pair

  • V3 uses the current price of the assets to calculate the correct amount of the other asset needed to create the trading pair

  • Single-sided liquidity providing can reduce the risk associated with providing liquidity since liquidity providers don't have to worry about the value of both assets in the trading pair

  • Liquidity providers can still earn trading fees even if they only provide one asset to the pool

Single-sided liquidity providing is useful for liquidity providers who may not have both assets on hand or want to reduce their risk exposure

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