Announcing xU3LP: Fungible, Convenient Liquidity Provision for Uniswap V3
Uniswap V3 is a major step forward for on-chain liquidity provision, endowing market makers with a newfound level of control and precision. While the advantages of V3 are clear, the immediate LPX (Liquidity Provider Experience™) challenges are apparent as well — namely, the non-fungibility of liquidity deposits, the manual fee collection and compounding, and the higher technical expertise required of LPs.
With that in mind, we’re excited to announce xU3LP — our first generation solution for providing liquidity on Uniswap V3.
To start, we’ll be launching with three stable pairs:
- xU3LPa: USDC<>DAI ○ 0.99xx⇋1.00xx
- xU3LPb: USDC<>USDT ○ 0.99xx⇋1.00xx
- xU3LPc: USDC<>sUSD ○ 0.99xx⇋1.00xx
All funds will be allocated to the pool that charges a 0.05% fee on swaps.
You’ll notice the price ranges at the end of each pair. For those unfamiliar with Uniswap V3, liquidity providers will be required to specify a relative price range within which they’re willing to make a market. Although we’re launching with pairs that are expected to trade within a very small range, there will still be some strategy and logic required to specify those ranges.
We’ve left placeholders (the “xx”s) for now, however, we’ve commissioned an independent research analyst to determine the maximally capital-efficient range parameters for each pair, based on backtested data from Curve (and other analyses). These ranges may change as we gather more information (Uniswap V3 hasn’t even launched!, so there’s some uncertainty), but we’re committed to a data-based approach going forward.
We’re excited to launch xU3LP on mainnet shortly after Uniswap V3 launch in May. For now, keep up to date with xToken and xU3LP development on Twitter and in Discord!
Note: We are likely to incentivize xU3LP funds with XTK rewards at xToken Cafe. Stay tuned for more details.
