Uniswap V3 User Revenue Analysis and How to Improve It with LP NFT Mining

(https://dune.xyz/msilb7/Uniswap-v3-Competitive-Analysis)

UniV3 user revenue status

(https://dune.xyz/cronii/Uniswap-v3)
(https://dune.xyz/cronii/Uniswap-v3)

How to increase LP’s revenue and improve capital efficiency

Izumi’s UNI V3 LP Mining

  1. nonce:NFT’s sequence number, a natural number starting from 0
  2. operator: the address which can operate this NFT, the default address is 0
  3. token0: the first type of token LP put in, represented by the smart contract address
  4. token1:the second type of token LP put in, represented by the smart contract address
  5. fee: the percentage of commission charged per transaction, 3000 means 0.3%
  6. tickLower: the tick of the lowest price in the price range where the liquidity is placed, p_l=1.0001^tickLower
  7. tickUpper:the tick of the highest price in the price range where the liquidity is placed, p_u=1.0001^tickUpper
  8. liquidity: Trading liquidity, expressed as a 128-bit number
  9. feeGrowthInsider0LastX128:The number of token0 in the accumulated fees (X128 is a mathematical deformation)
  10. feeGrowthInsider1LastX128:The number of token1 in the accumulated fees (X128 is a mathematical deformation)
  11. tokensOwed0: the number of tokens0 currently available for withdrawal in the accumulated fee
  12. tokensOwed1: the number of tokens1 currently available for withdrawal in the accumulated fee
  • Reward token: Number of tokens for liquidity mining incentive program
  • Reward per block: the number of liquidity mining incentive tokens distributed per block
  • Reward_tickUpper: the tick of the highest price in the price range of the liquidity mining incentive, Reward_pu=1.0001^Reward_tickUpper
  • Reward_tickLower:the tick of the lowest price in the price range of the liquidity mining incentive, Reward_pl=1.0001^Reward_tickLower
  • start_block: the block number at the start of the liquidity mining program
  • end_block:the block number at the end of the liquidity mining program

v_Liquidity=L*N²

N=max{min{tickUpper,Reward_tickUpper}-max{tickLower,Reward_tickLower},0}

Reward(NFT_i)=Reward per block/ Sum(NFT_i)

  1. Inclusiveness: LP will get rewards when the price range in the NFT of Uniswap V3 overlaps with the price range of the liquidity mining inventive.
  2. Effective bootability: Based on the same amount of token0 and token1, the maximum gain is obtained when the upper and lower bounds of the liquidity price range overlap exactly with the upper and lower bounds of the liquidity mining incentive price interval. For example, the user, who provides liquidity into a very small price range, will get a large Liquidity number and a small N , and eventually the liquidity mining incentive weight obtained by L*N² is less than the case of tiling the token to complete incentive price range.

About izumi Finance

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iZUMi Finance: A Multi-chain DeFi Protocol Providing One-Stop Liquidity as a Service; Twitter:twitter.com/izumi_Finance; Discord: discord.gg/izumifinance

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iZUMi Finance

iZUMi Finance

iZUMi Finance: A Multi-chain DeFi Protocol Providing One-Stop Liquidity as a Service; Twitter:twitter.com/izumi_Finance; Discord: discord.gg/izumifinance

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