Background The proposal's goal is to implement an organizational structure in the early stage of hunterDAO. There exists several unique organizational structures across DAOs that have all been considered. After careful review, a structure similar to GitcoinDAO seems to be the most sustainable, clear and at the same time effective from a management perspective. This proposal is the further development of GitcoinDAO mechanics.

Proposal Definition A sub-DAO can be thought of as an atomic unit within the hunterDAO. It is a coordinated group of people with specific tasks and goals aligned with the DAO’s mission. These sub-DAOs are funded by the hunterDAO and are given a set budget by the hunterDAO upon creation.

A sub-DAO is an independent entity and is free to set up its internal governance, processes, and structure without any approval from hunterDAO.

It is important to note that hunterDAO will not micromanage any sub-DAOs and will provide it with all necessary rights to operate per its goals and KPIs (Key Performance Indicators). When addressing internal sub-DAO issues, it is not necessary to create a hunterDAO-wide proposal, but instead, the sub-DAO will be given full autonomy to move forward on its own.

Below is a list of the rights maintained by a sub-DAO.

Right to define its own structure for pay. Right to seek outside sources of funding. Right communicate & cooperate with other sub-DAOs. hunterDAO's organizational structure may include multiple sub-DAOs, organized to complete a specific project, responsible for ongoing processes or lines of business.

Process Creating a sub-DAO requires a formal proposal only if it is requesting funding from hunterDAO. Otherwise, hunterDAO members may assemble to create a sub-DAO and carry out tasks without the approval of a formal proposal.

A sub-DAO requesting funds from the hunterDAO treasury must apply for funding by making a formal proposal.

Formal sub-DAO proposals must follow the standard governance proposal process and satisfy the following criteria:

Have a clear objective that aligns with the hunterDAO mission. Name a steward who is directly responsible and willing to take ownership of the objective and accountability for meeting it. Propose clear budgets and timelines for producing outcomes. The initial sub-DAO funding proposal must include the following information:

Vision

How does this project advance the hunterDAO goals or align with its values?

Target

What will be delivered by the sub-DAO using this funding?

Budget

What amount is required for the sub-DAO to achieve the initial target, and how will it be spent?

Milestones & Timeline

What are the key milestones for the initial target?

What is the timeline for completing the initial target?

Reporting

How frequently and in what form is the sub-DAO going to report its status?

Steward Responsible

Who is the steward managing the project and accountable for its outcomes?

Subsequent proposals for additional funding must include the following information:

Initial Funding Assessment

Was the initial target met? Was the project completed? Was it completed on time? Did it meet expectations? If the sub-DAO fails to deliver on something, what will be done to avoid those problems with the renewed funding?

Renewal Targets

What will be delivered by the sub-DAO using this funding?

Renewal Budget requirements

What amount is required for the sub-DAO to achieve its new target, and how will it be spent?

Reporting

How frequently and in what form is the sub-DAO going to report its status?

Steward Responsible

Who is the steward managing the project and accountable for its outcomes?

Specifications n/a Pros The proposal clearly outlines the mechanics and structure of a sub-DAO. The proposed mechanics have a proven track record in GitcoinDAO. The sub-DAO proposal is not a new concept, thus can be adopted quickly with an expected efficiency level. The proposal allows for earned independence within a sub-DAO. Cons The sub-DAO proposal is based on social consensus and human collaboration rather than blockchain mechanics.Summary The proposal defines the process of sub-DAO creation and funding, as well as the sub-DAO’s place in the hunterDAO organizational structure.

Background The proposal's goal is to implement an organizational structure in the early stage of hunterDAO. There exists several unique organizational structures across DAOs that have all been considered. After careful review, a structure similar to GitcoinDAO seems to be the most sustainable, clear and at the same time effective from a management perspective. This proposal is the further development of GitcoinDAO mechanics.

Proposal Definition A sub-DAO can be thought of as an atomic unit within the hunterDAO. It is a coordinated group of people with specific tasks and goals aligned with the DAO’s mission. These sub-DAOs are funded by the hunterDAO and are given a set budget by the hunterDAO upon creation.

A sub-DAO is an independent entity and is free to set up its internal governance, processes, and structure without any approval from hunterDAO.

It is important to note that hunterDAO will not micromanage any sub-DAOs and will provide it with all necessary rights to operate per its goals and KPIs (Key Performance Indicators). When addressing internal sub-DAO issues, it is not necessary to create a hunterDAO-wide proposal, but instead, the sub-DAO will be given full autonomy to move forward on its own.

Below is a list of the rights maintained by a sub-DAO.

Right to define its own structure for pay. Right to seek outside sources of funding. Right communicate & cooperate with other sub-DAOs. hunterDAO's organizational structure may include multiple sub-DAOs, organized to complete a specific project, responsible for ongoing processes or lines of business.

Process Creating a sub-DAO requires a formal proposal only if it is requesting funding from hunterDAO. Otherwise, hunterDAO members may assemble to create a sub-DAO and carry out tasks without the approval of a formal proposal.

A sub-DAO requesting funds from the hunterDAO treasury must apply for funding by making a formal proposal.

Formal sub-DAO proposals must follow the standard governance proposal process and satisfy the following criteria:

Have a clear objective that aligns with the hunterDAO mission. Name a steward who is directly responsible and willing to take ownership of the objective and accountability for meeting it. Propose clear budgets and timelines for producing outcomes. The initial sub-DAO funding proposal must include the following information:

Vision

How does this project advance the hunterDAO goals or align with its values?

Target

What will be delivered by the sub-DAO using this funding?

Budget

What amount is required for the sub-DAO to achieve the initial target, and how will it be spent?

Milestones & Timeline

What are the key milestones for the initial target?

What is the timeline for completing the initial target?

Reporting

How frequently and in what form is the sub-DAO going to report its status?

Steward Responsible

Who is the steward managing the project and accountable for its outcomes?

Subsequent proposals for additional funding must include the following information:

Initial Funding Assessment

Was the initial target met? Was the project completed? Was it completed on time? Did it meet expectations? If the sub-DAO fails to deliver on something, what will be done to avoid those problems with the renewed funding?

Renewal Targets

What will be delivered by the sub-DAO using this funding?

Renewal Budget requirements

What amount is required for the sub-DAO to achieve its new target, and how will it be spent?

Reporting

How frequently and in what form is the sub-DAO going to report its status?

Steward Responsible

Who is the steward managing the project and accountable for its outcomes?

Specifications n/a Pros The proposal clearly outlines the mechanics and structure of a sub-DAO. The proposed mechanics have a proven track record in GitcoinDAO. The sub-DAO proposal is not a new concept, thus can be adopted quickly with an expected efficiency level. The proposal allows for earned independence within a sub-DAO. Cons The sub-DAO proposal is based on social consensus and human collaboration rather than blockchain mechanics.

The proposal describes the vision and values of hunterDAO

Background

With the creation of any organization comes challenges in assembly. In order to combat these issues head on we’ve decided to present a proposal for the hunterDAO Manifesto.

This proposal aims to define the hunterDAO vision, mission, and shared values of its members. If passed, not only will this proposal be a stepping stone in building hunterDAO, but will be referenced in the future as an arbitrator any conflict that may arise.

Specifications

N/A

Pros

The proposal aims to breed a healthy and productive environment.

The proposal clearly outlines five essential values.

The proposal acts as a stepping stone for future hunterDAO growth.

Cons

The proposal may be missing some values that the members hold.

The proposal highlights five key values that the members may not prioritize.

Proposal

What is hunterDAO

hunterDAO is a product-focused community of contributors that have come together to support and grow web3 products and infrastructure. hunterDAO’s flagship product, Dexhunter is a trading terminal made for traders in DeFi era. Using Dexhunter, traders are able to leverage on-chain data to take advantage of the latest market trends and place their trades with more conviction than ever before. The hunterDAO community will continue to bring new ideas, new contributions and eventually, develop new products.

Our Vision

Our vision at hunterDAO is to build robust web3 products that people are excited to use. We want the community to drive development and be responsible for the progress of the products built by hunterDAO.

Our Mission

Our mission is to create a participatory, community-driven economy powered by the $hunter token that enables the support, development, engineering, and adoption of the Dexhunter and related products.

The best way of working towards this mission is to ensure community members see themselves as equal contributors to the project, aligned with the same goals.

Our Values

As a community, we believe in the core values that encourage us and unite toward community growth:

Decentralization

There is no core team, there is no one single center of authority. People have their voice, are able to express themselves, and get organized into sub-DAOs to multiply their efforts. We believe in the natural ability of the community to shape itself to find the best organizational fit and work towards each goal.

Contribution

Every member of the community is a contributor who dedicates their available resources towards DAO development and gets rewarded. Ignited by the same goal, we believe that the community may be distributed, diversified but first of all, it should be a team. We are in the same boat, so the way to success is to help each other.

Responsibility

We encourage people to take responsibility for the community, business areas, and new initiatives. People are the greatest asset of the DAO, and only their input and endeavor will lead the community to success.

Transparency

There is no single leader or management team, so everybody should have equal access to all information that affects DAO health.

Education

We share the hunter way - the path to becoming a hunter is one of constant learning. Learning from theory, learning from others, and by ourselves.

Pledge and Standards

It is important to us not only to build, but to build responsibly. Whether building products or communities - it is essential that everyone feels safe and welcomed at all times. We believe it is extremely important to set the standards for hunterDAO from day one, which is why we have developed the pledge below.

We as members, contributors, and leaders pledge to make participation in our community a harassment-free experience for everyone, regardless of age, body size, visible or invisible disability, ethnicity, sex characteristics, gender identity and expression, level of experience, education, socio-economic status, nationality, personal appearance, race, religion, or sexual identity and orientation. We pledge to act and interact in ways that contribute to an open, welcoming, diverse, inclusive, and healthy community.

Examples of behavior that contributes to a positive environment for our community include:

Demonstrating empathy and kindness toward other people

Being respectful of differing opinions, viewpoints, and experiences

Giving and gracefully accepting constructive feedback

Accepting responsibility and apologizing to those affected by our mistakes, and learning from the experience

Focusing on what is best not just for us as individuals, but for the overall community.

Examples of unacceptable behavior include:

The use of sexualized language or imagery, and sexual attention or advances of any kind

Trolling, insulting or derogatory comments, and personal or political attacks

Public or private harassment

Publishing others’ private information, such as a physical or email address, without their explicit permission

Other conduct which could reasonably be considered inappropriate in a professional setting.

Decentralized finance, also known as "DeFi", helps break down barriers that exist in the traditional system. It places control into the hands of the people and allows users to maximize yield on their tokens in a composable manner.

Non-fungible tokens are provably unique assets that empower creators, engineers, and communities to attain, trade and verify ownership of digital goods. They're more than just jpegs... explore the ways NFTs are utilized across the web3 ecosystem.

The proposal describes the governance process of the DAO

Background

The advised approach is based on the examples and best practices from other DAOs. The idea is to balance efficiency and process simplicity and create a straightforward lean process for the whole community. The process will help more people to engage in governance and reduce the time needed to make a decision.

Specifications

N/A

Pros

Straightforward governance process

Cons

Discuss the snapshot publishing threshold amount

Proposal

Any idea or initiative coming from a community member that is going to be a DAO wide rule must follow a governance process composed of several steps:

• Public Discussion and Temperature check

• Formal Proposal

• Voting

Public Discussion and Temperature Check

Any community member can bring up a HunterDAO related idea, problem, or proposal to the community for discussion. If they believe that DAO consensus on this idea is required, the proposer will initiate the discussion. It’s up to the proposer to get the momentum going.

In the case of active discussion, the proposer or active member can move the idea to the temperature check stage. A temperature check is a free form poll on discord or discourse that helps understand what the community feels about the initiative.

For the community’s convenience, the body of the poll should include:

• A description

• Key proposal features

• Short discussion recap

A temperature check can be launched in the free form of:

• Discord emoji voting

• Discourse poll on temperature check section

Timeline: no timeline

Requirements: no requirements

Platform: discord or discourse

Formal Proposal

After having reached a consensus on the Temperature Check, the initial proposer or another community member can submit the formal proposal to the governance forum. It’s up to the proposer to decide if a consensus around the topic is sufficient to move forward. It’s their responsibility to prepare the formal proposal.

The goal is to formally discuss the proposal and leave comments on the topic. Based on this discussion, the proposal is amended by the proposer to find consensus over the document.

The discussion period is at least 3 days(72 hours minimum). It may be more if there is active discussion - but no less. The proposer decides when or if the proposal is to move forward to the next step.

DAO contributors must use the following template when publishing a proposal on Discourse:

Title

• Short, clear description of the proposal

• Should include [proposal] tag

Summary

• Describe the proposal topic

Background

• What problem or opportunity are you looking to solve?

• Describe why the proposal is valuable to the community

Proposal

• Description of proposed changes

Specifications

• Technical details as applicable

Pros

• Reasons to vote for the proposal

Cons

• Potential reasons to vote against the proposal

Poll

• Temperature check voting, if it exists, and additional comments

Once we want to have all the proposals unified and standardized, it is important to meet the proposal structure. If the proposal doesn’t meet the required format, it’s within the purview of the authority of the discourse moderator to reject the proposal. In fact, it is the only reason to reject the proposal.

Timeline: 3+ days (72 hours minimum)

Requirements: The proposal should meet the requisite format and the Temperature Check link should be attached.

Platform: Discourse

Voting

Once the discussion has been done on the discourse, the initial proposer or another community member publishes the final version of the proposal on Snapshot.

The voting platform is based on Gnosis Safe + Snapshot and the Safesnap module, allowing execution of off-chain votes. In case the proposal involves on-chain action, the proposer should prepare the required transaction.

Timeline: 3 days (72 hours)

Quorum: At DAO Bootstrap Phase we expect a participation quorum of at least 10% of the total NFTs supply to pass any proposal successfully. For HunterDAO itself we should define quorum and proposals creation threshold after we figure out and discuss $GIT tokenomic.

Platform: Snapshot

Smart Contracts Overview

Uniswap V3 is a binary smart contract system comprised of many libraries, which together make the Core and Periphery

Core contracts provide fundamental safety guarantees for all parties interacting with Uniswap. They define the logic of pool generation, the pools themselves, and the interactions involving the respective assets therein.

Periphery contracts interact with one or more Core contracts but are not part of the core. They are designed to provide methods of interacting with the core that increase clarity and user safety.

External calls will primarily call the periphery interfaces. Externally available functions are all viewable in the reference documentation. Internal functions are viewable on the Uniswap V3 Github repo.

Core​

Core Source Code

The core consists of a single factory, a pool deployer, and the many pools the factory will create.

A significant amount of care and attention has been given to gas optimization in the core contracts. The result is a substantial reduction in gas costs for all protocol interactions compared to V2, at the cost of a reduction in code clarity.

Factory​

Factory Reference

The factory defines the logic for generating pools. A pool is defined by two tokens, which make up the asset pair, and a fee. There can be multiple pools of the same asset pair, distinguished only by their swap fee.

Pools​

Pool Reference.

Pools primarily serve as automated market makers for the paired assets. Additionally, they expose price oracle data and may be used as an asset source for flash transactions.

Periphery​

The periphery is a constellation of smart contracts designed to support domain-specific interactions with the core. As the Uniswap protocol is a permissionless system, the contracts described below have no special privileges and are only a small subset of possible periphery-like contracts.

SwapRouter​

Swap Router Reference

Swap Router Interface

The swap router supports all the basic requirements of a front-end offering trading. It natively supports single trades (x to y) and multihop trades (e.g. x to y to z).

Nonfungible Position Manager​

Nonfungible Position Manager Reference

Nonfungible Position Manager Interface

The position manager handles the logic transactions involving the creation, adjustment, or exiting of positions.

Oracle​

Oracle Reference

The oracle provides price and liquidity data useful for a wide variety of system designs, and is available in every deployed pool.

Periphery Libraries​

Periphery Libraries

The libraries provide a variety of helper functions developers may need, like calculating pool addresses, safe transfer functions, and more.

Edit this page

1. Uniswap v1 was launched in November 2018 as a proof of concept for automated market makers (AMMs), a type of exchange where anyone can pool assets into shared market making strategies.

In May 2020, Uniswap v2 introduced new features and optimizations, setting the stage for exponential growth in AMM adoption. Less than one year since its launch, v2 has facilitated over \$135bn in trading volume, ranking as one of the largest cryptocurrency spot exchanges in the world.

Uniswap now serves as critical infrastructure for decentralized finance, empowering developers, traders, and liquidity providers to participate in a secure and robust financial marketplace.

Today, we are excited to present an overview of Uniswap v3. We are targeting an L1 Ethereum mainnet launch on May 5, with an L2 deployment on Optimism set to follow shortly after.

Uniswap v3 introduces:

• Concentrated liquidity, giving individual LPs granular control over what price ranges their capital is allocated to. Individual positions are aggregated together into a single pool, forming one combined curve for users to trade against

• Multiple fee tiers , allowing LPs to be appropriately compensated for taking on varying degrees of risk

These features make Uniswap v3 the most flexible and efficient AMM ever designed:

• LPs can provide liquidity with up to 4000x capital efficiency relative to Uniswap v2, earning higher returns on their capital

• Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused AMMs

• LPs can significantly increase their exposure to preferred assets and reduce their downside risk

• LPs can sell one asset for another by adding liquidity to a price range entirely above or below the market price, approximating a fee-earning limit order that executes along a smooth curve

Uniswap's oracles are now far easier and cheaper to integrate. V3 oracles are capable of providing time-weighted average prices (TWAPs) on demand for any period within the last ~9 days. This removes the need for integrators to checkpoint historical values.

Even with these groundbreaking design improvements, the gas cost of v3 swaps on Ethereum mainnet is slightly cheaper than v2. Transactions made on the Optimism deployment will likely be significantly cheaper!

Read on for more details on Uniswap v3. For a deeper technical overview check out the Uniswap v3 Core whitepaper, the Uniswap v3 Core smart contracts.

In Uniswap v2, liquidity is distributed evenly along an x*y=k price curve, with assets reserved for all prices between 0 and infinity. For most pools, a majority of this liquidity is never put to use. As an example, the v2 DAI/USDC pair reserves just ~0.50% of capital for trading between $0.99 and $1.01 , the price range in which LPs would expect to see the most volume and consequently earn the most fees.

V2 LPs only earn fees on a small portion of their capital, which can fail to appropriately compensate for the price risk ("impermanent loss") they take by holding large inventories in both tokens. Additionally, traders are often subject to high degrees of slippage as liquidity is spread thin across all price ranges.

In Uniswap v3, LP's can concentrate their capital within custom price ranges, providing greater amounts of liquidity at desired prices. In doing so, LPs construct individualized price curves that reflect their own preferences.

LPs can combine any number of distinct concentrated positions within a single pool. For example, an LP in the ETH/DAI pool may choose to allocate $100 to the price ranges $1,000-$2,000 and an additional $50 to the ranges $1,500-$1,750.

By doing so, an LP can approximate the shape of any automated market maker or active order book.

Users trade against the combined liquidity of all individual curves with no gas cost increase per liquidity provider. Trading fees collected at a given price range are split pro-rata by LPs proportional to the amount of liquidity they contributed to that range.

By concentrating their liquidity, LPs can provide the same liquidity depth as v2 within specified price ranges while putting far less capital at risk. The capital saved can be held externally, invested in different assets, deposited elsewhere in DeFi, or used to increase exposure within the specified price range to earn more trading fees.

Let's illustrate with an example:

Alice and Bob both want to provide liquidity in an ETH/DAI pool on Uniswap v3. They each have \$1m. The current price of ETH is 1,500 DAI.

Alice decides to deploy her capital across the entire price range (as she would have in Uniswap v2). She deposits 500,000 DAI and 333.33 ETH (worth a total of \$1m).

Bob instead creates a concentrated position, depositing only within the price range from 1,000 to 2,250. He deposits 91,751 DAI and 61.17 ETH, worth a total of about $183,500. He keeps the other $816,500 himself, investing it however he prefers.

While Alice has put down 5.44x as much capital as Bob, they earn the same amount of fees, as long as the ETH/DAI price stays within the 1,000 to 2,250 range.

Bob's custom position also acts as a kind of stop-loss for his liquidity. Both Alice and Bob's liquidity will be entirely denominated in ETH if the price of ETH falls to $0. However, Bob will have lost just $159,000, versus Alice's $1m. Bob can use his additional $816,500 to hedge against downside exposure or to invest in any other conceivable strategy.

Instead of providing equivalent liquidity depth as a v2 LPs with less capital, v3 LPs can choose to provide greater depth with the same amount of capital as their v2 counterparts. This requires taking on more price risk ("impermanent loss") while supporting greater amounts of trading and earning higher fees.

LPs in more stable pools will likely provide liquidity in particularly narrow ranges. If the ~$25m currently held in the Uniswap v2 DAI/USDC pair was instead concentrated between 0.99 — 1.01 in v3, it would provide the same depth as $5bn in Uniswap v2 as long as the price stayed within that range. If the ~$25m was concentrated into the 0.999 - 1.001 range it would provide the same depth as $50b in Uniswap v2.

The tool below calculates the capital efficiency gains of a concentrated liquidity position (centered around the current price) relative to allocating capital across the entire price curve.

Liquidity Deposit Value

Value of paired tokens

$

Select ETH price range

Current Price: $1,820

V3 Range Position

Capital Required

$150,000

Fees per $ vs. V2

5.24x

V2 Position

Capital Required

$785,779

These two positions will earn equal fees and perform idenitcally while the price remains between $1200 and $2800.

At launch, capital efficiency gains will max out at 4000x for LPs providing liquidity within a single 0.10% price range. The v3 pool factory is technically capable of supporting ranges as granular as 0.02%, translating to a maximum 20,000x capital efficiency gains relative to v2. However, more granular pools can increase swap gas costs and might be more useful on Layer 2.

If market prices move outside an LP's specified price range, their liquidity is effectively removed from the pool and is no longer earning fees. In this state, an LP's liquidity is composed entirely of the less valuable of the two assets, until the market price moves back into their specified price range or they decide to update their range to account for current prices.

In v3, it is theoretically possible for no liquidity to exist in a given price range. However, we expect rational LPs to continuously update their price ranges to cover the current market price.

V3's LP customizability opens up a novel order feature to complement market orders, which we are calling 'range orders'.

LPs can deposit a single token in a custom price range above or below the current price: if the market price enters into their specified range, they sell one asset for another along a smooth curve while earning swap fees in the process.

Depositing to a narrow range feels similar to a traditional limit order. For example, if the current price of DAI is below 1.001 USDC, Alice could add \$10m worth of DAI to the range of 1.001 — 1.002 DAI/USDC.

Once DAI trades above 1.002 DAI/USDC, Alice's liquidity will have fully converted into USDC. Alice must withdraw her liquidity (or use a third-party service to withdraw on her behalf) to avoid automatically converting back into DAI if DAI/USDC starts trading below 1.002.

The average execution price of a fully executed range order is the geometric average of the minimum and maximum price: in Alice's case, the execution price equals 1.001499 DAI/USDC for a total of \$1,001,499. This execution price does not account for additional swap fees earned during the period in which prices trade within the 1.001 — 1.002 DAI/USDC range.

Range orders within wider ranges may prove particularly useful for profit-taking, buying the dip, and primary issuance events: in the later use case, issuers are now able to deposit liquidity in a single asset and specify the exact range of prices across which they wish to sell their tokens.

As a byproduct of per-LP custom price curves, liquidity positions are no longer fungible and are not represented as ERC20 tokens in the core protocol.

Instead, LP positions will be represented by non-fungible tokens (NFTs). However, common shared positions can be made fungible (ERC20) via peripheral contracts or through other partner protocols. Additionally, trading fees are no longer automatically reinvested back into the pool on LPs' behalf.

Over time we expect increasingly sophisticated strategies to be tokenized, making it possible for LPs to participate while maintaining a passive user experience. This could include multi-positions, auto-rebalancing to concentrate around the market price, fee reinvestment, lending, and more.

Uniswap v3 offers LPs three separate fee tiers per pair — 0.05%, 0.30%, and 1.00%. This array of options ensures that LPs tailor their margins according to expected pair volatility: LPs take on more risk in non-correlated pairs like ETH/DAI and, conversely, take on minimal risk in correlated pairs like USDC/DAI.

Although distinct fee tiers may lead to some degree of liquidity fragmentation, we believe that most pairs will calibrate to an 'obvious' fee tier, which then serves as the canonical market. We expect like-kind asset pairs to congregate around the 0.05% fee tier and pairs like ETH/DAI to use 0.30%, while exotic assets might find 1.00% swap fees more appropriate. governance can add additional fee tiers as needed.

Uniswap v2 introduced a protocol fee switch, which allowed a flat 5 basis point (16.66% of LP fees) fee to be turned on by governance. Uniswap v3 protocol fees are far more flexible. Fees will be off by default, but can be turned on by governance on a per-pool basis and set between 10% and 25% of LP fees.

Uniswap v2 introduced time weighted average price (TWAP) oracles. These oracles serve as a critical piece of DeFi infrastructure, and have been integrated into dozens of projects, including Compound and Reflexer.

V2 oracles work by storing cumulative sums of Uniswap pair prices on a per-second basis. These price sums can be checked once at the beginning of a period and once at the end to calculate an accurate TWAP over that period.

Uniswap v3 offers significant improvements to the TWAP oracle, making it possible to calculate any recent TWAP within the past ~9 days in a single on-chain call. This is achieved by storing an array of cumulative sums instead of just one.

This array of historical price accumulators makes it far easier and cheaper to create more advanced oracles that include simple-moving averages (SMA), exponential moving averages (EMA), outlier filtering, and more.

Despite this major improvement, the gas cost to Uniswap traders for keeping oracles up to date has been reduced by ~50% relative to v2. The costs for calculating TWAPs in external smart contracts is significantly cheaper as well.

We strongly believe decentralized financial infrastructure should ultimately be free, open-source software. At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase.

With this in mind, Uniswap v3 Core will launch under the Business Source License 1.1—effectively a time-delayed GPL-2.0-or-later license. The license limits use of the v3 source code in a commercial or production setting for up to two years, at which point it will convert to a GPL license into perpetuity.

Uniswap governance can accelerate the change to GPL or grant exemptions to the license at any time by updating the files at ***v3-core-license-date.uniswap.eth ***and ***v3-core-license-grants.uniswap.eth ***.

Note that the BUSL 1.1 license does not affect integrations. All code that may be needed for external integrations has been licensed under GPL or MIT , including math libraries, peripheral contracts, interfaces, and the developer sdk. Any wallet, interface, mobile app, protocol, or other project will be able to integrate with v3 as expected.

For more information on this license, see this FAQ.

Our team believes security is of the utmost importance — it took hundreds of hours of testing for us to feel comfortable with launching Uniswap v3.

Our security process for v3 included:

• A full-length audit from Trail of Bits

• A full-length audit from ABDK

• A full audit from samczsun (no report)

• An auditing and review process from our engineering team

• A comprehensive test suite, including the automated tools Echidna and Manticore

Major bugs discovered as part of the testing and auditing process were fixed. However, we would like to note that Uniswap v3 is an extremely complex protocol and we cannot guarantee all bugs have already been discovered and resolved.

To help find any open vulnerabilities, a public bug bounty will run over the next 30 days, with up to \$500,000 offered for critical bugs. More detail on the public bug bounty can be found here.

The Uniswap v3 smart contracts will be deployed to the Ropsten, Rinkeby, Kovan, and Görli testnets in the coming days, giving developers time to begin experimenting with the protocol before the official launch.

• The Uniswap v3 Core repository contains the essential, low-level smart contracts that power the protocol.

• The Uniswap v3 Periphery repository contains a collection of smart contracts designed to ease user interaction with core contracts.

A liquidity provider migration portal will be available at launch, allowing v2 LPs to seamlessly transfer their liquidity to the new protocol.

In the meantime, there are few outstanding items to complete:

• Partners and integrations can begin building on Uniswap v3 immediately, in preparation for mainnet launch!

• The interface, analytics site, API, and developer SDK are being redesigned to work with Uniswap v3.

• The initial Uniswap v3 router and position manager contracts are almost complete. While still subject to change, they are available here.

• Documentation, guides, and further examples are in progress.

• Additional infrastructure to support fungibile positions, liquidity mining, more complex strategies, and various other use cases will be built by Uniswap Labs together with the Uniswap community after mainnet launch

On Friday, March 26 at 2pm ET we will host an AMA on the official Uniswap Discord, where we hope to answer any outstanding questions you may have around Uniswap v3. Questions can be submitted ahead of time here.

We will be releasing further updates, additional information, and initial documentation over the coming days and welcome all feedback and involvement from our community.

If you are integrating and wish to get in touch, please fill out this form and we will try to respond as soon as possible. Alternatively, reach out in the #v3-integrations channel in the community Discord

To get involved and stay up to date:

• Join the Uniswap community discord

• Follow Uniswap on Twitter

• Subscribe to the Uniswap blog

• Register as a delegate Sybil

• Participate in Uniswap governance

Uniswap Team

from uniswa team.

1.Today, we are excited to share some recent features and improvements to the Uniswap ecosystem:

• Layer 2 Beta (Improved UX!)

• Developer Guides

• Help Center

• EIP-1559 Support

• ENS on Sybil

The Uniswap v3 deployments on Optimistic Ethereum and Arbitrum are ready to graduate from Alpha to Beta.

We’re excited to release the network selector dropdown in the Uniswap App! Starting with today’s Beta release, users can seamlessly access all supported networks directly in the Uniswap App.

We’ve also released a fast confirmation UX to showcase the lightning speed of Layer 2 networks!

Lastly, as a precautionary measure, we’ve implemented downtime detection so the Uniswap App will report liveness of the network.

The early successes of Optimistic Ethereum and Arbitrum have been incredibly promising. We’re excited to offer a better experience in the Uniswap App and hope it will invite more users to experiment with L2 networks.

Optimistic Ethereum - Since launching Uniswap v3 on Optimistic Ethereum two months ago, total value locked (TVL) has steadily grown to $35M. Over the past 30 days alone, 49,000 unique addresses have generated $165m volume across 158k trades, regularly saving up to 25x on swap costs relative to L1!

We want to highlight that the Optimistic Ethereum network will undergo a ‘Regenesis’. Both Uniswap Labs and the Optimism team will provide further reminders and notices as we get closer to the Regenesis event.

Arbitrum - Uniswap v3 was deployed on Arbitrum on June 2 following a community snapshot vote. The network officially opened to the public on August 31 and adoption has quickly soared: over the past two weeks, the Arbitrum deployment has seen over $345M trade volume on $39M TVL!

Although user funds were never at risk, the Arbitrum sequencer experienced 45 minutes of downtime on September 14. We want to remind users that further outages are still possible as the Arbitrum network continues to find its feet. Nevertheless, we believe that the limited extent and severity of issues to date warrants cautiously moving the Uniswap v3 deployment to Beta status.

We are committed to educating developers and making the Uniswap protocol more accessible to all with informative developer docs and guides.

To that end, we have published six new developer guides:

• Smart Contract Guides

  • How to Swap

  • How to Provide Liquidity

  • How to Create a Liquidity Mining program

• Javascript SDK Guides

  • How to Swap

  • How to Provide Liquidity

  • How to Fetch Spot Prices

We’ll continue publishing docs on a weekly basis so stay tuned for more!

We are steadily expanding the Uniswap Help Center to offer more walkthroughs and FAQs.

Recently we published a complete set of guides to walk you through every step from deposit to withdrawal on Layer 2 Optimistic Ethereum and Arbitrum User Guides. We’ve also added an FAQ and article about Swap Error Codes.

Ethereum upgraded to EIP-1559 last month and we’re happy to say that it is fully compatible with the Uniswap app. The app now sends a type 2 transaction to nudge your wallet to choose the optimal Base Fee and Priority Fee for your transaction.

Since the EIP-1559 launch, 43,577 ETH has been burned by transactions interacting with the Uniswap Protocol.

We’ve added Ethereum Name Service (ENS) support to sybil.org! If an address is not Twitter verified, Sybil will now fetch their ENS name to help you identify the delegate.

To get involved and stay up to date:

• Join the Uniswap community discord

• Follow Uniswap Labs on Twitter

• Subscribe to the Uniswap Labs blog

• Register as a delegate on Sybil

• Participate in Uniswap governance

Uniswap Team

1.Developing tools to strengthen DAO governance is critical to robust decentralization. Today, we’re excited to share a new effort toward that goal. In collaboration with Scopelift, we are releasing Seatbelt, a test suite for governance proposals. Seatbelt can be used by any DAO using Governor Bravo, the governance contracts facilitating DAOs like Uniswap and Compound Protocols. This initial release includes several basic checks (listed below) and generates reports on proposals prior to votes for the Community’s review so that delegates and token-holders have the critical information they need for their decisions. Over time, through collaboration with the Uniswap Protocol community and other communities that can benefit from its development, we hope Seatbelt becomes more comprehensive.

When the Uniswap Protocol DAO upgraded to Governor Bravo last August, a minor bug was found and fixed. We wrote about it here. There was no impact to the Protocol or DAO, but it was an important reminder that governance proposals are often one-way paths and require more infrastructural support to back up security reviews.

At launch, Seatbelt will check Ethereum for new proposals every hour, run a series of checks on all active proposals and publish reports in a GitHub repo for anyone to review. For example, a Seatbelt report on Compound proposal 80 can be found here. These checks will:

• List all referenced addresses - any address that’s touched by this proposal’s execution

• Confirm all contracts referenced by the proposal are verified on Etherscan

• List all state changes and events resulting from the proposal execution

Soon, through continued collaboration, we hope that Seatbelt will also support:

• Showing compiler warnings in referenced contracts

• Results from running static analysis tools against the verified smart contracts

• Simulating proposals locally to identify issues before proposals are submitted on chain

We look forward to working with the Uniswap Community and other communities to continue to improve DAO governance.

Adding a “Seatbelt” to secure governance proposals

1.Developing tools to strengthen DAO governance is critical to robust decentralization. Today, we’re excited to share a new effort toward that goal. In collaboration with Scopelift, we are releasing Seatbelt, a test suite for governance proposals. Seatbelt can be used by any DAO using Governor Bravo, the governance contracts facilitating DAOs like Uniswap and Compound Protocols. This initial release includes several basic checks (listed below) and generates reports on proposals prior to votes for the Community’s review so that delegates and token-holders have the critical information they need for their decisions. Over time, through collaboration with the Uniswap Protocol community and other communities that can benefit from its development, we hope Seatbelt becomes more comprehensive.

When the Uniswap Protocol DAO upgraded to Governor Bravo last August, a minor bug was found and fixed. We wrote about it here. There was no impact to the Protocol or DAO, but it was an important reminder that governance proposals are often one-way paths and require more infrastructural support to back up security reviews.

At launch, Seatbelt will check Ethereum for new proposals every hour, run a series of checks on all active proposals and publish reports in a GitHub repo for anyone to review. For example, a Seatbelt report on Compound proposal 80 can be found here. These checks will:

• List all referenced addresses - any address that’s touched by this proposal’s execution

• Confirm all contracts referenced by the proposal are verified on Etherscan

• List all state changes and events resulting from the proposal execution

Soon, through continued collaboration, we hope that Seatbelt will also support:

• Showing compiler warnings in referenced contracts

• Results from running static analysis tools against the verified smart contracts

• Simulating proposals locally to identify issues before proposals are submitted on chain

We look forward to working with the Uniswap Community and other communities to continue to improve DAO governance.

1. We believe users should access Web3 on chains with properties that are important to them. That’s why we’re excited the Uniswap community voted to deploy v3 on Polygon – just as the community suggested Arbitrum earlier last year. The Polygon deployment is the 4th chain for v3 after Mainnet, Optimism, and Arbitrum and has given users access to even faster transactions, even lower gas fees, and more applications. As the community considers deploying to additional networks, we want to share some lessons learned and thoughts on cross-chain deployments.

We believe that community members should be able to more easily signal support for, and approve, cross-chain Uniswap Protocol deployments. So today, we have publicly released the deployment script and documentation outlining how to deploy Uniswap Protocol v3 to other chains. (The Uniswap Labs team is available to answer technical questions in the governance forum and in our weekly Developer Office Hours soon) We’ve also proposed simplifications of the community governance process that can guide future cross-chain proposals from the community. And we’re exploring the UI to create proposals to make adding exemptions to the v3 license file easier. We welcome input and feedback on these suggested simplifications.

When evaluating a Uniswap v3 deployment, we encourage the community to pay close attention to the security and trust assumptions of the bridge being used to relay governance to that chain. Uniswap Governance contracts live on L1 Ethereum, so when the Protocol is deployed to a new network, UNI holders need a bridge contract to govern the Protocol on that network. Few networks offer general trust-minimized bridges that support arbitrary message passing. Without those bridges, the Uniswap community would rely on either trusted bridges or multi-sigs to handle governance updates, which could affect the Protocol’s existing security guarantees.

We expect cross-chain experiences to play a large part in growth and user experience improvement this year. As the multi-chain world continues to develop, more bridges will be developed or updated to support bridging governance actions from Ethereum Mainnet. We’re excited to see where the community takes the Protocol next.

From uniswap team.

1.Today, we’re releasing a series of features to improve pricing and optimize gas cost of swaps:

• An updated Auto Router that finds the best price across Uniswap v2 + v3 while optimizing for gas prices

• Auto Router support for Uniswap Protocol on Layer 2 Networks

• Real-time gas estimates on your swap

• Smarter auto slippage

We’re also releasing the full Auto Router to the community as a convenient npm package and sharing new developer tools:

• Auto Router npm package

• Atomic swap + add liquidity

• Oracle-based slippage

The updated Auto Router improves trade prices even further by routing trades across both Uniswap v2 and v3 pools. It also finds the best price across all Uniswap protocols, and optimizes gas costs in the process, so you never have to worry about which version you’re using.

In addition, starting today the Auto Router supports all of the Uniswap Protocol’s Layer 2 networks: Optimistic Ethereum and Arbitrum. The combination of highly efficient trade pricing of the Auto Router with the low gas costs of a Layer 2 network, delivers a cheaper trading experience than ever before.

To help you make informed decisions about gas costs, we’re also excited to announce gas cost estimates in the Uniswap App. You will now see a USD estimate of the gas fee before submitting a swap, so you can wait for the right moment to trade.

Finally, we’re releasing two new capabilities for Uniswap developers. The first is called ‘Swap-and-add liquidity’ which allows you to provide liquidity with one asset instead of two by automatically swapping to the right ratio. The second is slippage limits relative to v3’s time-weighted-average-price feeds.

In September, we launched the Auto Router, a smart order routing algorithm that splits trades across multiple Uniswap v3 pools while accounting for gas costs.

The Auto Router has been a major win for Uniswap v3 users: our analysis shows that the Auto Router improves pricing for 13.97% of all trades and 36.84% of trades between the Top 10 tokens by TVL.

While Uniswap v3 has grown to over $3b in daily trade, Uniswap v2 remains a large liquidity venue on Ethereum, with over $700m in volume.

The Auto Router now splits trades across both v2 and v3 liquidity pools to find the best price across both these industry-leading protocols. Additionally, trades on v2 can be split across up to seven paths to take advantage of liquidity depth in different pools. The Auto Router is also gas-aware and will only take an extra hop or split if it results in a better net rate for you.

In the example below, the new Auto Router finds a +0.64% better price quote by splitting the trade across both Uniswap v2 and v3 liquidity.

These improvements are made possible by a new SwapRouter contract which will require new ERC-20 token approvals. In order to save gas fees, the app will compare the older router price to the new router price, and only use the new router if it offers a better price.

By default, the App uses a Uniswap Labs hosted instance of the Auto Router to efficiently compute your route with low latency. For those who wish to remove this dependency, you can disable the Auto Router API in settings to compute your route locally in the browser, with slightly higher latency.

The Auto Router is now available on all networks where Uniswap Protocol is deployed: Optimistic Ethereum and Arbitrum. This makes trading on these networks even more efficient than before.

Gas prices have increased over the past few months and knowing the right time to submit a transaction can be difficult. We’re excited to launch an estimated gas cost feature, allowing you to monitor the true cost of a swap in real time directly from the App interface.

We’re using these gas estimates to get smarter about slippage, too. Historically, the App has defaulted to 0.5% slippage because in many cases you’re better off re-submitting a transaction that fails due to high slippage. But if you’re trading smaller amounts, high gas fees often make resubmission too costly.

The Uniswap App will now automatically set slippage based on your expected gas cost and trade size. For smaller trades, the App will adjust slippage tolerance to improve the chance of the transaction succeeding. As always, you can manually set your slippage limits in the App settings.

The above improvements are made possible by the open-source Auto Router. In order to help more developers take advantage of these capabilities, we are today launching an npm package to quickly import the Auto Router in your project. Read this developer guide to get started with the @uniswap/smart-order-router package.

The new SwapRouter02.sol contract has been deployed and is fully open source. Check out the code on GitHub.

The new router contract now offers an atomic ‘swap-and-add’ function that makes it possible to provide liquidity with only one of the asset’s in the pool, or any ratio of the two assets.

In order to add liquidity to a Uniswap v3 pool, the user or contract must provide two assets in a particular ratio. In many cases, the user only holds a single asset or an arbitrary ratio of the two assets. This means you often have some tokens left over after adding liquidity. A simple approach is to submit a swap transaction to reach the optimal ratio and then submit an add liquidity transaction -- but your swap (and other transactions in between) will have changed the optimal ratio!

The new SwapRouter makes it possible to swap and then add liquidity in a single atomic transaction. The smart-order-router npm package even includes a function to compute the optimal ratio and transaction calldata. Check out this new developer guide to learn how to swap-and-add in your project today.

This is available to developers today and coming soon to the Uniswap App.

The new router also allows you to limit the relative price impact of trades as measured against v3 oracles, not just the current state of on-chain liquidity. For example, a user swapping ETH for USDC could specify that their swap can only execute within one percentage point of the five minute ETH/USDC time-weighted average price. This mitigates MEV and sandwich attacks for safe, automated, permissionless trading. Check out the OracleSlippage.sol contract for more detail.

We’re excited for you to enjoy smarter swaps in the Uniswap App and to hear about your experience using the new features.

To get involved and stay up to date:

• Join the Uniswap community discord

• Follow Uniswap Labs on Twitter

• Subscribe to the Uniswap Labs blog

• Register as a delegate on Sybil

• Participate in Uniswap governance

That’s all.

1.Today we’re excited to announce the release of our new Auto Router! The Auto Router uses an advanced smart order routing algorithm to find better prices for traders in the Uniswap app. This includes:

• Split routes which execute trades across multiple pools at once

• More powerful algorithm that considers a larger data set for larger trades and better prices

• Gas cost awareness ensures every added step is net positive for your trade

Lastly, if there is a better trade available on Uniswap v2 after accounting for gas costs, the Auto Router will automatically switch to v2.

One way that the Auto Router achieves better prices is by splitting trades across multiple pools. In the legacy router, a trade was always executed through a single route. Now, your trade can be split across up to seven paths to take advantage of liquidity depth in different pools. In the example below, the trader saves \$134,689 by splitting the route on a COMP:USDC trade. This is more than enough to cover the additional gas cost of the second route.

The addition of multiple fee tiers in Uniswap v3 makes this feature more important than ever.

The Auto Router optimizes your price by splitting the route across multiple pools.

The Auto Router enables efficient execution, especially on large trades. At the time of writing this, without the Auto Router an 80M USDT:USDC swap would incur a price impact of -62.9%. With the Auto Router, the same trade can be executed with a price impact as low as -0.749%.

The Auto Router explores liquidity at greater depth than the standard router which previously ran out of gas.

The Auto Router factors in gas costs to optimize your effective price. With today’s launch, smaller trades will execute more efficiently by minimizing the number of gas-intensive hops to reach the output token. For example, this ETH:LINK trade saves \$8 in gas fees to deliver a 10% better net price by removing a hop from the route.

The Auto Router is aware of gas costs and will only take an extra hop if it yields a better effective price.

The Auto Router is now live and enabled by default for all users in the Uniswap App. You can hover over the Auto Router icon to peak into your trade route.

You may disable the Auto Router in settings if you do not wish to use the Auto Router for any reason.

We are deeply committed to decentralized and open-source financial infrastructure. In that spirit, we have published the full Auto Router source code under the GPL license.

• @uniswap/routing-api: Wraps and deploys the smart-order-router as a hosted service.

• @uniswap/smart-order-router: Contains the logic for finding the most efficient way to swap token A for token B, considering split swaps across multiple routes and gas costs.

The Uniswap App fetches quotes from an instance of the Auto Router hosted by Uniswap Labs. Local developers and IPFS builds will be able to call the Auto Router API up to a modest request limit. The app will fallback to legacy routing when the request limit is exceeded, and in any situation where the Auto Router fails to return a quote. If your app needs to handle a higher load, you are welcome to deploy your own instance of the Auto Router from the open source code.

We will host a Twitch livestream over the coming weeks to walk through the Auto Router codebase and teach developers how to work with it.

In our analysis of 4,429 on-chain swaps from June 1, the Auto Router improves pricing on 13.97% of all trades and 36.84% of trades between the Top 10 tokens by TVL.

Benefits are spread across all trade size buckets. Many low value trades benefit from the Auto Router’s awareness of gas costs, allowing it to recommend fewer hops for better overall execution. For larger trades, price improvements are primarily driven by the Auto Router’s new route splitting capabilities and ability to explore more liquidity.

The Auto Router improves trades of all sizes

Our journey has only just begun! We will continue iteratively improving the Auto Router to unlock better trade prices for users of the Uniswap App. The next release will support splitting routes across Uniswap v2 and v3 simultaneously and we also plan to support routes on Optimistic Ethereum and Arbitrum.

Additionally, we intend to further decentralize the Auto Router for the Uniswap Community by publishing a client-side version of the Auto Router.

For now, enjoy improved prices in the Uniswap App!

To get involved and stay up to date:

• Join the Uniswap community discord

• Follow Uniswap Labs on Twitter

• Subscribe to the Uniswap Labs blog

• Register as a delegate on Sybil

• Participate in Uniswap governance

https://uniswap.org/blog/uniswap-v3

1. Uniswap v1 was launched in November 2018 as a proof of concept for automated market makers (AMMs), a type of exchange where anyone can pool assets into shared market making strategies.

2.In May 2020, Uniswap v2 introduced new features and optimizations, setting the stage for exponential growth in AMM adoption. Less than one year since its launch, v2 has facilitated over \$135bn in trading volume, ranking as one of the largest cryptocurrency spot exchanges in the world.

3.Uniswap now serves as critical infrastructure for decentralized finance, empowering developers, traders, and liquidity providers to participate in a secure and robust financial marketplace.

Today, we are excited to present an overview of Uniswap v3. We are targeting an L1 Ethereum mainnet launch on May 5, with an L2 deployment on Optimism set to follow shortly after.

Uniswap v3 introduces:

• Concentrated liquidity, giving individual LPs granular control over what price ranges their capital is allocated to. Individual positions are aggregated together into a single pool, forming one combined curve for users to trade against

• Multiple fee tiers , allowing LPs to be appropriately compensated for taking on varying degrees of risk

These features make Uniswap v3 the most flexible and efficient AMM ever designed:

• LPs can provide liquidity with up to 4000x capital efficiency relative to Uniswap v2, earning higher returns on their capital

• Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused AMMs

• LPs can significantly increase their exposure to preferred assets and reduce their downside risk

• LPs can sell one asset for another by adding liquidity to a price range entirely above or below the market price, approximating a fee-earning limit order that executes along a smooth curve

Uniswap's oracles are now far easier and cheaper to integrate. V3 oracles are capable of providing time-weighted average prices (TWAPs) on demand for any period within the last ~9 days. This removes the need for integrators to checkpoint historical values.

Even with these groundbreaking design improvements, the gas cost of v3 swaps on Ethereum mainnet is slightly cheaper than v2. Transactions made on the Optimism deployment will likely be significantly cheaper!

Read on for more details on Uniswap v3. For a deeper technical overview check out the Uniswap v3 Core whitepaper, the Uniswap v3 Core smart contracts.

In Uniswap v2, liquidity is distributed evenly along an x*y=k price curve, with assets reserved for all prices between 0 and infinity. For most pools, a majority of this liquidity is never put to use. As an example, the v2 DAI/USDC pair reserves just ~0.50% of capital for trading between $0.99 and $1.01 , the price range in which LPs would expect to see the most volume and consequently earn the most fees.

V2 LPs only earn fees on a small portion of their capital, which can fail to appropriately compensate for the price risk ("impermanent loss") they take by holding large inventories in both tokens. Additionally, traders are often subject to high degrees of slippage as liquidity is spread thin across all price ranges.

In Uniswap v3, LP's can concentrate their capital within custom price ranges, providing greater amounts of liquidity at desired prices. In doing so, LPs construct individualized price curves that reflect their own preferences.

LPs can combine any number of distinct concentrated positions within a single pool. For example, an LP in the ETH/DAI pool may choose to allocate $100 to the price ranges $1,000-$2,000 and an additional $50 to the ranges $1,500-$1,750.

By doing so, an LP can approximate the shape of any automated market maker or active order book.

Users trade against the combined liquidity of all individual curves with no gas cost increase per liquidity provider. Trading fees collected at a given price range are split pro-rata by LPs proportional to the amount of liquidity they contributed to that range.

By concentrating their liquidity, LPs can provide the same liquidity depth as v2 within specified price ranges while putting far less capital at risk. The capital saved can be held externally, invested in different assets, deposited elsewhere in DeFi, or used to increase exposure within the specified price range to earn more trading fees.

Let's illustrate with an example:

Alice and Bob both want to provide liquidity in an ETH/DAI pool on Uniswap v3. They each have \$1m. The current price of ETH is 1,500 DAI.

Alice decides to deploy her capital across the entire price range (as she would have in Uniswap v2). She deposits 500,000 DAI and 333.33 ETH (worth a total of \$1m).

Bob instead creates a concentrated position, depositing only within the price range from 1,000 to 2,250. He deposits 91,751 DAI and 61.17 ETH, worth a total of about $183,500. He keeps the other $816,500 himself, investing it however he prefers.

While Alice has put down 5.44x as much capital as Bob, they earn the same amount of fees, as long as the ETH/DAI price stays within the 1,000 to 2,250 range.

Bob's custom position also acts as a kind of stop-loss for his liquidity. Both Alice and Bob's liquidity will be entirely denominated in ETH if the price of ETH falls to $0. However, Bob will have lost just $159,000, versus Alice's $1m. Bob can use his additional $816,500 to hedge against downside exposure or to invest in any other conceivable strategy.

Instead of providing equivalent liquidity depth as a v2 LPs with less capital, v3 LPs can choose to provide greater depth with the same amount of capital as their v2 counterparts. This requires taking on more price risk ("impermanent loss") while supporting greater amounts of trading and earning higher fees.

LPs in more stable pools will likely provide liquidity in particularly narrow ranges. If the ~$25m currently held in the Uniswap v2 DAI/USDC pair was instead concentrated between 0.99 — 1.01 in v3, it would provide the same depth as $5bn in Uniswap v2 as long as the price stayed within that range. If the ~$25m was concentrated into the 0.999 - 1.001 range it would provide the same depth as $50b in Uniswap v2.

The tool below calculates the capital efficiency gains of a concentrated liquidity position (centered around the current price) relative to allocating capital across the entire price curve.

Liquidity Deposit Value

Value of paired tokens

$

Select ETH price range

Current Price: $1,820

V3 Range Position

Capital Required

$150,000

Fees per $ vs. V2

5.24x

V2 Position

Capital Required

$785,779

These two positions will earn equal fees and perform idenitcally while the price remains between $1200 and $2800.

At launch, capital efficiency gains will max out at 4000x for LPs providing liquidity within a single 0.10% price range. The v3 pool factory is technically capable of supporting ranges as granular as 0.02%, translating to a maximum 20,000x capital efficiency gains relative to v2. However, more granular pools can increase swap gas costs and might be more useful on Layer 2.

If market prices move outside an LP's specified price range, their liquidity is effectively removed from the pool and is no longer earning fees. In this state, an LP's liquidity is composed entirely of the less valuable of the two assets, until the market price moves back into their specified price range or they decide to update their range to account for current prices.

In v3, it is theoretically possible for no liquidity to exist in a given price range. However, we expect rational LPs to continuously update their price ranges to cover the current market price.

V3's LP customizability opens up a novel order feature to complement market orders, which we are calling 'range orders'.

LPs can deposit a single token in a custom price range above or below the current price: if the market price enters into their specified range, they sell one asset for another along a smooth curve while earning swap fees in the process.

Depositing to a narrow range feels similar to a traditional limit order. For example, if the current price of DAI is below 1.001 USDC, Alice could add \$10m worth of DAI to the range of 1.001 — 1.002 DAI/USDC.

Once DAI trades above 1.002 DAI/USDC, Alice's liquidity will have fully converted into USDC. Alice must withdraw her liquidity (or use a third-party service to withdraw on her behalf) to avoid automatically converting back into DAI if DAI/USDC starts trading below 1.002.

The average execution price of a fully executed range order is the geometric average of the minimum and maximum price: in Alice's case, the execution price equals 1.001499 DAI/USDC for a total of \$1,001,499. This execution price does not account for additional swap fees earned during the period in which prices trade within the 1.001 — 1.002 DAI/USDC range.

Range orders within wider ranges may prove particularly useful for profit-taking, buying the dip, and primary issuance events: in the later use case, issuers are now able to deposit liquidity in a single asset and specify the exact range of prices across which they wish to sell their tokens.

As a byproduct of per-LP custom price curves, liquidity positions are no longer fungible and are not represented as ERC20 tokens in the core protocol.

Instead, LP positions will be represented by non-fungible tokens (NFTs). However, common shared positions can be made fungible (ERC20) via peripheral contracts or through other partner protocols. Additionally, trading fees are no longer automatically reinvested back into the pool on LPs' behalf.

Over time we expect increasingly sophisticated strategies to be tokenized, making it possible for LPs to participate while maintaining a passive user experience. This could include multi-positions, auto-rebalancing to concentrate around the market price, fee reinvestment, lending, and more.

Uniswap v3 offers LPs three separate fee tiers per pair — 0.05%, 0.30%, and 1.00%. This array of options ensures that LPs tailor their margins according to expected pair volatility: LPs take on more risk in non-correlated pairs like ETH/DAI and, conversely, take on minimal risk in correlated pairs like USDC/DAI.

Although distinct fee tiers may lead to some degree of liquidity fragmentation, we believe that most pairs will calibrate to an 'obvious' fee tier, which then serves as the canonical market. We expect like-kind asset pairs to congregate around the 0.05% fee tier and pairs like ETH/DAI to use 0.30%, while exotic assets might find 1.00% swap fees more appropriate. governance can add additional fee tiers as needed.

Uniswap v2 introduced a protocol fee switch, which allowed a flat 5 basis point (16.66% of LP fees) fee to be turned on by governance. Uniswap v3 protocol fees are far more flexible. Fees will be off by default, but can be turned on by governance on a per-pool basis and set between 10% and 25% of LP fees.

Uniswap v2 introduced time weighted average price (TWAP) oracles. These oracles serve as a critical piece of DeFi infrastructure, and have been integrated into dozens of projects, including Compound and Reflexer.

V2 oracles work by storing cumulative sums of Uniswap pair prices on a per-second basis. These price sums can be checked once at the beginning of a period and once at the end to calculate an accurate TWAP over that period.

Uniswap v3 offers significant improvements to the TWAP oracle, making it possible to calculate any recent TWAP within the past ~9 days in a single on-chain call. This is achieved by storing an array of cumulative sums instead of just one.

This array of historical price accumulators makes it far easier and cheaper to create more advanced oracles that include simple-moving averages (SMA), exponential moving averages (EMA), outlier filtering, and more.

Despite this major improvement, the gas cost to Uniswap traders for keeping oracles up to date has been reduced by ~50% relative to v2. The costs for calculating TWAPs in external smart contracts is significantly cheaper as well.

We strongly believe decentralized financial infrastructure should ultimately be free, open-source software. At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase.

With this in mind, Uniswap v3 Core will launch under the Business Source License 1.1—effectively a time-delayed GPL-2.0-or-later license. The license limits use of the v3 source code in a commercial or production setting for up to two years, at which point it will convert to a GPL license into perpetuity.

Uniswap governance can accelerate the change to GPL or grant exemptions to the license at any time by updating the files at ***v3-core-license-date.uniswap.eth ***and ***v3-core-license-grants.uniswap.eth ***.

Note that the BUSL 1.1 license does not affect integrations. All code that may be needed for external integrations has been licensed under GPL or MIT , including math libraries, peripheral contracts, interfaces, and the developer sdk. Any wallet, interface, mobile app, protocol, or other project will be able to integrate with v3 as expected.

For more information on this license, see this FAQ.

Our team believes security is of the utmost importance — it took hundreds of hours of testing for us to feel comfortable with launching Uniswap v3.

Our security process for v3 included:

• A full-length audit from Trail of Bits

• A full-length audit from ABDK

• A full audit from samczsun (no report)

• An auditing and review process from our engineering team

• A comprehensive test suite, including the automated tools Echidna and Manticore

Major bugs discovered as part of the testing and auditing process were fixed. However, we would like to note that Uniswap v3 is an extremely complex protocol and we cannot guarantee all bugs have already been discovered and resolved.

To help find any open vulnerabilities, a public bug bounty will run over the next 30 days, with up to \$500,000 offered for critical bugs. More detail on the public bug bounty can be found here.

The Uniswap v3 smart contracts will be deployed to the Ropsten, Rinkeby, Kovan, and Görli testnets in the coming days, giving developers time to begin experimenting with the protocol before the official launch.

• The Uniswap v3 Core repository contains the essential, low-level smart contracts that power the protocol.

• The Uniswap v3 Periphery repository contains a collection of smart contracts designed to ease user interaction with core contracts.

A liquidity provider migration portal will be available at launch, allowing v2 LPs to seamlessly transfer their liquidity to the new protocol.

In the meantime, there are few outstanding items to complete:

• Partners and integrations can begin building on Uniswap v3 immediately, in preparation for mainnet launch!

• The interface, analytics site, API, and developer SDK are being redesigned to work with Uniswap v3.

• The initial Uniswap v3 router and position manager contracts are almost complete. While still subject to change, they are available here.

• Documentation, guides, and further examples are in progress.

• Additional infrastructure to support fungibile positions, liquidity mining, more complex strategies, and various other use cases will be built by Uniswap Labs together with the Uniswap community after mainnet launch

On Friday, March 26 at 2pm ET we will host an AMA on the official Uniswap Discord, where we hope to answer any outstanding questions you may have around Uniswap v3. Questions can be submitted ahead of time here.

We will be releasing further updates, additional information, and initial documentation over the coming days and welcome all feedback and involvement from our community.

If you are integrating and wish to get in touch, please fill out this form and we will try to respond as soon as possible. Alternatively, reach out in the #v3-integrations channel in the community Discord

To get involved and stay up to date:

• Join the Uniswap community discord

• Follow Uniswap on Twitter

• Subscribe to the Uniswap blog

• Register as a delegate Sybil

• Participate in Uniswap governance

Z.Uniswap Team 🦄