Few weeks ago the announcement of the 3rd iteration of Uniswap hit the Crypto World.
Thousands of blog posts, tweets and articles have been posted to comment the new design and explain what will be its impact on impermanent loss for liquidity providers, how concentrated liquidity will boost returns and how a major flexibility in setting price ranges will guarantee a higher capital efficiency.
Here at Defi-Lab.xyz , we decided to build a tool to show how Uniswap V3 works, how different strategies can be set up and how the behaviour of Uniswap V3 strategies compare to other standard strategies in different market conditions.
The tool let you set your own specific price range activating your liquidity under predetermined market conditions.
Using our simulator you will be able to determine the increased efficiency and the extra fees you will earn compared to a classical AMM strategy (used by Uniswap V2, SushiSwap, Balancer and all other standard AMM).You will also be able to simulate advanced strategies like range orders that can be used to enter or exit a position similarly to a limit order in a standard order book exchange.
In the following two articles we will explain the functioning of the Simulator:
In order to use our tool a basic understanding of automated market makers (AMM) and in particular Uniswap V2 and V3 is required. The following links can be used as reference for initial informations on these topics:
- Uniswap V3 introduction — Introduction to Uniswap V3
- Uniswap a unique exchange — Introduction to Uniswap and AMM
