@garellaslojr
Uniswap V3 introduces Concentrated Liquidity, a new model that allows liquidity providers to specify the price range in which they want to provide liquidity. This enables them to tailor risk and rewards to their strategy, achieving higher capital efficiency. By selecting a custom range, LPs can focus their capital on areas where they expect the most significant trading volume, potentially increasing returns while reducing exposure to impermanent loss. The model also offers better price stability and slippage control for traders by concentrating liquidity in tight price ranges, improving the overall trading experience.
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