V3 AMM
Concentrated Liquidity AMM.
The AMM functions akin to Univ3, incorporating various custom features to improve efficiency and performance. In addition to overall enhancements from the vanilla Univ3 codebase, significant improvements have been integrated, including:
Customizable Tick spacing
The V3 AMM gives users the power to customize tick spacing settings for individual liquidity pools, offering unprecedented flexibility with tailored tick parameters. By enabling adjustments to tick spacing, the V3 AMM guarantees optimal efficiency for each pool, leading to enhanced volume and fee generation.
Directional & Dynamic Volatility Fees
V3 introduces a fee system that responds to market volatility, resulting in significant efficiency improvements. The protocol dynamically adjusts fees for each liquidity pool based on current volatility levels, boosting fee generation and trade volume.
A notable aspect of this feature is the ability to set unique fee ranges based on volatility for both buying and selling directions. This allows each liquidity pool to offer customized fee structures tailored to specific market conditions, leading to higher fees and trading volume as fees accurately reflect the market's risk profile.
During periods of low trading activity, fees automatically decrease to prevent users from facing high fees in quieter market conditions. Conversely, when the market experiences increased volatility, fees increase proportionally to address the heightened risk.
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