Synthetix V3 introduces isolated liquidity pools that enable more customized markets for synthetic assets. While this innovation offers liquidity providers greater flexibility and targeted exposure to specific assets, it also presents the risk of fragmentation. If these isolated markets don’t attract enough liquidity, the total value locked (TVL) might suffer, with capital being spread too thin across different pools. However, if Synthetix can create enough incentives and attract liquidity from both new and existing market participants, it could lead to significant TVL growth. The success of V3 will depend on the ecosystem’s ability to balance pool isolation with liquidity aggregation, ensuring that these markets don’t compete for liquidity in a way that reduces overall market depth.