How will the new AMM story change the Defi market?

原文标题：《 UNISWAPV3 版本特性和寿司限价单的对比，NFT 在 defi 的大规模应用要起来了! 》

原文作者： 大橙子&小同的干货铺，

This post is from Knowledge Planet blogger Big Orange & Small with the dry goods shop, if you need to reprint, please contact the original author for authorization.

preface

千呼万唤之后，Uniswap V3 目标在 5 月 5 日启动 L1 以太坊主网，不久之后还将在 Optimism 上进行 L2 部署。

This article will provide an in-depth review of Uniswap V3 and discuss its impact on the DEFI and NFT markets.

1.Token

In UNISWAPv2, liquidity is evenly distributed along the X * Y = K price curve. If we take the grid trading category, the upper limit of the grid trading is infinite and the lower limit is 0. For most of the pool, the vast majority of liquidity will not use, this is a great waste of LP money, for an example, the official blog V2DAI/USDC to retain only about 0.50% of the funds for trading between $0.99 to $101, but the vast majority of DAI/USDC transaction at this price, that is to say, in the pool of funds, DAI/USDC for LP, this is a big waste of money, 99.5% of the funds left unused. Even Curve, which improves the AMM Curve formula, still has the problem of wasting LP funds.

Customize any segment of the XY curve to add fluidity.

What does that mean? For example, the price of ETH is 1800USDT, but in the ETH/USDT trading pair, the current LP is the price range of 0~ infinity, now LPER can be for any section to add liquidity, you can add a section of 200~500, you can also add any section of 600~1800.

What's the advantage of doing this? It's a huge savings. Officials give an example:

Alice and Bob both want to provide liquidity in the ETH/DAI pool of Uniswapv3. They each have $1 million. The current price of ETH is 1,500 DAl.

Alice decides to deploy funds across the entire price range (just like in UNISWAPv2). She deposits 500,000DAI and 333.33 ETH(total value $1 million).

Instead, Bob created a concentrated position and deposited LP only in the price range of 1,000 to 2250. He deposited 91,751DAI and 61.17ETH, with a total value of about $183,500. He keeps the rest of the S816500 for himself, but can invest it as he wishes. Although Alice invested 5.44 times as much money as Bob, as long as the ETH/DAI price remained in the 1000-2250 range, they were able to earn the same amount of fees.

Although Bob bears more free loss than Alice when the ETH price is less than $1000 or more than $2250, Bob's saved $816,500 can be used to establish derivative positions such as futures or options to hedge the position risk of the relevant LP.

In addition to increasing the efficiency of capital utilization, the best advantage of this approach is the further concentration of depth. We know that in a centralized security market, the price near the transaction price is the deepest, because it represents people's expected pricing.

At the same time, multiple LP depths with different expectations are aggregated, which are more like the natural and centralized depth (the centralized depth is biased, such as large order in a block), and thus, Group-taker is more likely to experience the centralized experience.

However, if the user-added liquidity has been floating outside the market, LPER will not be able to get a fee.

This is so clever compared to simply adding a price limit for sushi. Why? We know that in the DEFI industry, it's common knowledge that the pool model has survived, such as lending, ETHLEND did peer-to-peer trading for two and a half years and took off after learning COMP as a pool model. Dex, for example. Uniswap's previous various order book Dex models struggled, and as a result, Uniswap took off after using the capital pool model.

Uniswap, on the other hand, stuck with the pool model, dividing the pool into smaller pieces that better express the LPER's point of view. It was smarter than making sushi with limited-order inserts.

Since LPToken is no longer a standard Token, the LP Token of V3 version is NFT, which may be a large-scale application of NFT in DEFI, because NFT was limited to insurance in DEFI before. For example, insurance projects such as YInsure and INS3 used NFT as underwriting capital, while insurance is a niche area of DEFI. If V3 uses NFT as LPToken on a large scale, Then the large-scale use of NFT in DEFI is up!

Token，从而让质押 NFT 挖矿成为目前项目方冷启动的主流，这种有意义的质押挖矿会进一步推动 NFT 的发展，这种可以简单定价的 NFT 也会进一步催生 NFT 的借贷和转让市场快速发展。

当然产生 NFT 形式的 LPtoken 的 gas 也许会很贵，不知道会不会进一步抵消目前 V3 在更新路由算法 (跟 1inch 一致的最节省 gas 的路由算法，路由这块估计已经优化到极致了) 从而节省 gas 费的努力。

2.「资金池」模式的限价单

In addition to some liquidity, V3 has also made an "in-range order" similar to a limit order. Lper can deposit individual XTokens in a custom price range above or below the current price. If the market price enters its specified range, they sell XTokens along a smooth curve in exchange for YTokens, earning Maker fees in the process. Store a custom price range similar to a traditional limit order.

For example, if DAI's current price is below 1.001USDC, then Alice can sell USDC in the range of 1001-1002DAI/USDC while buying DAL worth $10 million.

If the USDC is greater than 1002DAI, then the USDC in Alice's hand is completely replaced with DAI, and if the USDC is less than 1.002dai, the swapping process stops.

这种资金池模式的"限价单"模式，比如单纯指定价格的限价单更合理。

3.V3's handling fee is more flexible

Uniswap V3 offers three separate fee classes for LPs per pair -0.05%, 0.30% and 1.00%. This gives the pool creators more freedom to manage the pool, but apparently there may be three different pools for each trading pair, such as ETH/DAI, resulting in a spread of liquidity, but the project side believes that the pool will be concentrated in an "obvious" expense tier. In fact, Balancer's practice also supports this view (Balancer supports the establishment of a capital pool with different fees, but LP focuses on a "reasonable" capital pool).

4. Advanced Seer

The V3 version of the Uniswap version will provide more services, including TWAP, etc. I will not go into details here.

conclusion

V3 具体细节出来前，市场上对 V3 有各种揣测，但是更多意见是在 L2 上，大多数 DEX 项目认为 AMM 算法已经优化到尽头，没什么可以优化的，加入 CEX 的报价作为预言机或者限价单让 AMM 更完美就足够了。但是 Uniswap 没有， 没想到于其实就是一个「无数网格机器人叠加，然后给网格机器人一个 NFT」的创新 ，还可以继续让 AMM 算法重新发挥光芒。

Again, really understand AMM algorithm, or only the inventor of AMM algorithm, the fork (bifurcation) cannot solve the V3. V4. The problem of V5, and only by original project like AAVE, UNI, COMP to bring investors constant innovation premium, and the fork of the project value will always be the ceiling, because other people's story is not finished, and you have already finished.

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