Uniswap v3 claims to be the most powerful version of the protocol with concentrated Liquidity providing unprecedented capital efficiency for liquidity providers, better execution for traders, and superior infrastructure at the heart of decentralized finance.
There is a Uniswap Interface which helps route trades via Uniswap V3. When a better exchange is available on Uniswap V2 it alerts the users and users can swap.
There is a Uniswap Pool Interface helps identify the popular liquidity pools in the ecosystem.
For those who are new, Uniswap is a protocol which is used to create liquidity to trade ERC-20 tokens on Ethereum.
To start off with Uniswap users need to have some Ethereum Wallet and some ETH. Whether to Swap or to Pool users should connect their wallet with the system.
With ETH staking you get in to a liquidity position in one of the pools. Thus, becoming a part of the liquidity pool that is providing liquidity for ERC-20 tokens – whether for swap or trade.
To pool you choose the pair for which you are trying to provide liquidity for. You select the token versus the common bases. You choose the pool type depending upon the preferred liquidity provider fee.
Your liquidity will only earn fees when the market price of the pair is within you range and you can pick the range for which you are willing to provide liquidity for. You can define the minimum and maximum price.
The liquidity pools are made in a way that it has only two assets. If you want to be a liquidity provider you have to choose in which pool you want to lock your value in and which market you would like to make. Once you are in the pool and you have set the range, you are all set for the market making.
For swapping, swaps are the most common way of interacting with the Uniswap protocol. For end-users, swapping is straightforward. A user selects an ERC-20 token that they own and a token they would like to trade it for. Executing a swap sells the currently owned! And, you are done with swapping.
Where you make profits is based on the value tapping that you are trying to achieve in a volatile market. In the cryptocurrency market, the value of tokens keep going up and down. When you swap you are actually trying to hold the token that is gaining value.
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