Uniswap v3 Fee Tiers
Uniswap v3 fee structure — 0.01%, 0.05%, 0.30%, 1% tiers for different pairs.
Uniswap v3 introduced Multiple Fee Tiers and Concentrated Liquidity — a revolutionary AMM design giving LPs much more control.
Fee Tiers:
•0.01% — Ultra-stable pairs (USDT/USDC, USDC/DAI)
•0.05% — Stable correlated pairs (ETH/stETH, WBTC/ETH)
•0.30% — Standard volatile pairs (ETH/USDC, BTC/USDT)
•1% — Exotic volatile pairs (new altcoins)
Concentrated Liquidity:
•v2: LP provides liquidity from $0 to ∞
•v3: LP chooses price range (e.g. ETH between $1800-$2200)
•Within range: 100× more capital efficient than v2
•Outside range: LP doesn't receive fee, capital inactive
LP strategies:
•Wide range: less efficient, less rebalancing
•Tight range: high fee income, but quickly goes "out of range"
•Active LP management: constant rebalancing
Automated CL management:
•Arrakis Finance, Gamma Strategies — automated v3 LP
•Automatically rebalance when price leaves range
NFT LP position:
•Each v3 LP position is an NFT (ERC-721)
•Contains: pool, fee tier, range, amount
•Can be collateral in some protocols
v3 vs v2 for LP:
•v3 potentially 100× higher income in range
•v3 higher IL risk on volatile pairs
•v2 "set and forget", v3 requires active management