QuickSwap, which had already deployed its V3 on Dogechain, has released the QuickSwap V3 on Polygon too.
The news for the release of QuickSwap V3 came out in June 2022. During that time, the Dragon community of QuickSwap voted to acquire an exclusive Algebra’s V3 concentrated liquidity model operating license on DEX platforms.
This vote came in favour of the need for launching QuickSwap V3 – enabling community members and users to swap, provide liquidity, and farm. Does that sound fun? Let’s discuss how this update from QuickSwap V2 to QuickSwap V3 has more to offer below.
The Difference: How is QuickSwap V3 Better?
- V3 permits LPs to deposit liquidity pairs within a specified price range.
- V3 LPs can provide more depth with the same quantity. This means that reduced liquidity will accrue more significant trading fee incentives.
- Concentrated liquidity signifies that LPs will get trading fees when assets trade within predetermined price bands.
- When an LP’s value deviates from the range established by the LP, the liquidity provider has two options: 1) When the price returns to a reasonable range, the LP will refund the original assets. Or 2) Remove liquidity and re-establish a new range.
- Individual LPs design price curves that represent their personal tastes.
- Compared to V2 AMMs, LPs are required to contribute less money to V3 AMMs.
- Users can trade against the aggregate liquidity of all individual curves without increasing gas costs per liquidity provider. The LPs split trading fees at a price range proportionally (pro-rata allocation) according to how much they contributed to this range.
As per this upgrade, when it comes to providing liquidity on QuickSwap’s V3, the fact that your assets will be converted regardless of price movement is the most significant consideration! In contrast, when the price ratio goes down, the liquid asset is the one that gets converted into the asset with the lower value.
In addition to this, the price may go down, and because of the heightened volatility, you may now no longer qualify for the offer. When the market starts moving in the opposite direction, the LP needs to remove the liquidity to avoid having the position automatically converted back. In addition, if the price moves within the range, your tokens may be converted into another asset whose value is proportional to the per cent ratio.
QuickSwap is a fork of Uniswap that was created to address the inadequacies of decentralized exchanges (DEXs) and automated market makers that are currently in operation (AMMs). The user experience is highly comparable to that of Uniswap. QuickSwap, on the other hand, is constructed on the Polygon network, while Uniswap is put on the Ethereum blockchain.
Does this sound like something you’re interested in? Want to learn how to use QuickSwap’s V3 on Polygon?
Follow the tutorial on this link: QuickSwap on Twitter