How does an AMM price tokens?
Uniswap V2 charges a 0.3% fee on every swap, which historically all went to LPs. After governance enabled protocol fees, the protocol takes 0.05% from V2 pools on Ethereum mainnet, while LPs receive 0.25%.
Uniswap V3 introduced concentrated liquidity, allowing liquidity providers to use their funds to make markets only within price ranges they choose.
When managing funds, the most important thing to remember is this: for tokens in shallow pools, check the displayed slippage before making a large swap. You can split it into several swaps.
$UNI 7.742 (+1.83%)
Uniswap V2 charges a 0.3% fee on every swap, which historically all went to LPs. After governance enabled protocol fees, the protocol takes 0.05% from V2 pools on Ethereum mainnet, while LPs receive 0.25%.
Uniswap V3 introduced concentrated liquidity, allowing liquidity providers to use their funds to make markets only within price ranges they choose.
When managing funds, the most important thing to remember is this: for tokens in shallow pools, check the displayed slippage before making a large swap. You can split it into several swaps.
$UNI 7.742 (+1.83%)