V3 Add Liquidity (concentrated)
Last updated
Last updated
V3 enables liquidity providers to concentrate their capital within specific price ranges, leading to increased liquidity at preferred prices. Users can choose to employ both manual mode and auto mode, with the latter automating the adjustment of price ranges.
You can access data about token pairs on the pools V3 tab or the analytics page
To provide liquidity to V3, navigate to the Trade tab, select Liquidity and choose V3
Select a pair
Start by selecting the pair you want to use for providing liquidity. Take into account factors like trading volume, TVL, and the potential risk of price volatility in the future.
Also, check if the pair is incentivized with market maker rewards, which serve as an additional layer of rewards
Market Maker incentives are distributed via Merkl, which checks onchain data for incentivized pools using an offchain script
These rewards are given out every 6 hours, depending on how many tokens you've earned and the fees your position has collected during that time. Therefore, the narrower the range, the higher the market maker rewards
The exact distribution formula for market maker rewards
For more specific information about how the mechanism works, you can refer to Merkl documentation
Select a mode
The mode you choose depends on the specific utility you seek:
Manual mode is tailored for experienced liquidity providers, granting them control over the price ranges of the liquidity they provide
Auto mode employs focused liquidity management strategies, handling the intricate task of adjusting price ranges for users
