Beta Launch: Introducing Flawless (V3) Liquidity
Introduction
Welcome to VVS Finance, your go-to platform for decentralized exchange (DEX) on Cronos chain. We’re excited to share the good news that VVS Flawless (V3) Liquidity is now available for our users! The main objective of this Beta launch is to let our users get familiar with this new feature and gather valuable feedback from our users, so that we can further optimize our product.
V3 Farm is yet to be available in this Beta launch, but our team is already working on it and planning to release the V3 farms in Q4! You can choose to migrate your V2 to V3 Liquidity now or wait until our V3 farms and official launch is live. For now, let’s dive into the differences between V2 and V3, and learn more about VVS Flawless (V3) Liquidity!
TL;DR:
Beta launch — Key Features of Flawless V3 Liquidity:
- Multi-Tier Fee For Swap & Traders
- Flawless (V3) Liquidity
- Capital Efficiency
- Active Liquidity
- Range Limit Orders
- Non-Fungible Liquidity
Official launch — Coming Soon in Q4:
- V3 Farms
- V3 Analytic Page
Overview of V2
Let’s start with a quick overview of VVS V2 Liquidity, the foundation of our platform’s growth and popularity. In V2, when you stake liquidity in a regular trading pool, your liquidity is spread along the entire price curve, from 0 to infinity. Whenever someone trades within the pool, you would receive a share of the transaction fee as rewards. However, this approach resulted in capital inefficiency since most assets typically trade within specific price ranges. This inefficiency was particularly evident in pools with stablecoin pairs that had a narrow trading range, causing much of the liquidity to remain unused.
Introduction to V3
To improve capital efficiency, we’re thrilled to introduce VVS Flawless (V3) Liquidity, a significant milestone in our platform’s evolution. V3 incorporates numerous upgrades and refinements based on valuable feedback from our vibrant community. Our primary goal with V3 is to enhance capital efficiency, empowering our users to fully utilize their capital, and be able to earn more swap fees through providing liquidity. This is a significant milestone to our platform, as we are taking one more step towards sustainability. Get ready to embark on a more seamless and rewarding DeFi experience!
Feature Comparison
Let’s take a look at some of the key features of V3:
Multi-Tier Fee For Swap & Traders: In VVS Flawless (V3) Liquidity, there will be four different trading fee tiers, 0.01%, 0.05%, 0.3%, and 1%, compared to V2’s 0.3%. It’s worth highlighting that every token pair has the potential for a liquidity pool with each fee tier. Nevertheless, asset pairs are likely to lean towards the fee tier that better matches incentives for both liquidity providers (LPs) and traders. In brief, the various fee tiers serve the purpose of finding a middle ground for traders and liquidity providers, enabling traders to access the lowest fee tiers, while motivating the LPs to provide the maximum liquidity possible.
Flawless (V3) Liquidity: When LPs add liquidity to a V2 pool, it’s distributed evenly along the price curve. However, this approach can be inefficient because assets often trade within specific price ranges. This is especially noticeable in pools with stable assets that have narrow trading ranges. In V3, LPs now have the option to select a custom price range while providing liquidity. This enables the concentration of capital within the intervals where the majority of trading activities occur.
Capital Efficiency: By concentrating their liquidity in V3, LPs can provide the same liquidity depth as V2 within specified price ranges without putting the same amount of total capital at risk. The capital saved can be held externally, invested in different assets, staked elsewhere in DeFi, or used to increase exposure within the specified price range to earn more trading fees.
Active Liquidity: Active Liquidity is a new feature of V3. When the price of assets within a particular liquidity pool on VVS V3 falls outside of the price range set by LP, the LP’s liquidity is effectively removed from the pool and stops earning fees. This results in the LP’s liquidity becoming entirely shifted to one of the assets and they will be holding only one of them. Given this situation, the LPs can either adjust their selected price range or wait until the market price moves back into their expected price range.
Range Limit Orders: This VVS V3 feature enables the situation when the market price enters into the specified range, one asset is sold for another along a smooth curve, while still earning swap fees in the process. When LPs use this feature together with a narrow range, it allows LPs to achieve a similar goal to a standard limit order that can be set at a specific price.
For example, assuming USDC/USDT trades below 1.001. An LP stakes their USDC to a narrow range between 1.001 and 1.002. Once USDC trades above 1.002 USDC/USDT, the whole LP’s liquidity will be converted into USDT. At this point, the LP has to withdraw their liquidity if they wish to avoid it automatically converting back into USDC once USDC/USDT goes back to trading below 1.002.
Non-Fungible Liquidity: LP tokens will be tracked by non-fungible ERC721 tokens (NFTs). Each LP can create their own price curve with new V3 features and each liquidity position is not fungible anymore.
Enhanced User Interface and Experience: We’ve enhanced the user interface (UI) and overall user experience (UX) in VVS Flawless (V3) Liquidity. The platform now features a more user-friendly interface with improved aesthetics and easier navigation. We want to ensure that your staking journey is seamless, intuitive, and visually appealing. V3 is designed to empower you with better capital efficiency, more flexibility, higher rewards, and better overall staking experience. As a valued member of the VVS Finance community, we’re committed to providing you with the best possible features and benefits.
Migration Process
With the latest VVS Flawless (V3) Liquidity launch, you can take full advantage of our LP migration process for a smooth transition from V2 to V3 on VVS Finance by following the below steps:
- Go to VVS Finance website at https://vvs.finance/, you will see a banner for VVS Flawless (V3) Liquidity on the top of the page. You can also see the banner on ‘My Farms’ and ‘My Liquidity’ page for your convenience. Just simply click on the ‘Explore Now’ and it will lead you to the ‘Flawless (V3) LP Migration Helper’ page. Please make sure that you are accessing the correct website before you connect your wallet to the platform.
- Click “Unstake” and follow the process to initiate the unstaking of your Standard (V2) LP tokens. It’s important to note that when you unstake your LP tokens, any earned rewards will be automatically harvested. A warm reminder here, if you have staked any NFTs in a farm, you should unstake all the NFTs before unstaking your Standard (V2) LP tokens.
- Once you have successfully unstaked your V2 LP tokens, click “Next Step” to proceed with the migration process.
- On the Migration page, you will be presented with options to select your active liquidity, choose a desired Fee Tier, and set a price range for your V3 LP tokens. Carefully review the available options before making your selection.
- After choosing your active liquidity and Fee Tier, click on the “Migrate Liquidity” button to initiate the migration process. Double-check the details you have selected before proceeding. Once confirmed, the migration will be initiated, and your V2 LP tokens will be converted to V3 LP tokens as per your chosen options.
Coming soon:
- V3 Farms in Q4
- V3 Analytic Page
- More exciting V3 features to come!
Our team is working on various new V3 features, including V3 farms, V3 analytic page, UI/UX optimization and more exciting V3 features! Stay tuned to our social media for official launch details and more updates!
