Did anyone catch why they choose optimism?
What is the most interesting for LP: spreading liquidity over some range, assuming ? or trying to find the tighter range possible?
This makes me think: is liquidity the new prediction market for the short term price?
How would a crash like yesterday (05/20/2021) or last march last year (03/12/2020) look like on V3? will trade in average cross more tick, hence use more gas?
I think that there is a general need that has been identified for a scaling solution. As far as optimism versus other solutions, I think it’s just the first scaling solution that people feel will be ready for implementation.
v3 has more volume / less capital.
I think liquidity is more likely to be a lagging indicator, but there is a question of how well wisdom of the crowd works for market prediction. No clear data presented on this yet as far as I know.
Since the release of this whitepaper, there are two important threads to follow up on: 1) Migration Progress and 2) Performance of v3. I have made an attempt to outline these concepts below.
Uniswap v3 migration has been proceeding at a consistent rate. In terms of trade volume, at this point, v3 has overtaken v2. v2 still exceeds v2 on TVL, but TVL is a non-comparable metric for these two versions. Capital efficiency can be defined as trade volume per $ of TVL. v3 is broadly delivering on the promise of improved capital efficiency. The capital efficiency of Uniswap v3 for the largest 5 pools far exceeds that of the comparable pools in Uniswap v2.
Source: Dune
The TVL in Uniswap v3 at the time of writing had grown to 1.74b USD.
Source: Uniswap Info
This is roughly 35% of the TVL in v2 at the time of writing.
Source: Uniswap Info
Stable-stable and stable-eth pools are two of the largest types of pools in v3. We start to see some differentiated use cases for these pools in v3. Stable-pools have grown far more in v3 than the TVL lost in v2 through migration. For most pools there has been a decrease in liquidity proportional to or greater than the liquidity growth of the comparable pools in v3.
Source: Flipside
In the current state, the largest v2 pools remaining are the Fei protocol, stable-eth, and btc-eth pools.
Source: Flipside
At the time of writing (June 10th), the top 5 v3 pairs represent a mix of stable-eth, stable-stable, btc-eth, and uni-eth. Uni-eth and stable-stable pools have emerged as new use cases in v3, which did not receive as much traction in v2 prior to the update.
Source: Flipside
This group of pools from Uniswap v3 (with the exception of the two new use cases) experienced a sharp decline at the end of 2020 and have continued to grow in the early part of 2021. This growth in TVL continued even into the month of May while v3 was ramping up. It was not until the beginning of June when v2 TVL really started to decline.
One reasonable explanation of this is that v2 LPs (after a delay) have started to become more comfortable with providing liquidity in Uniswap v3, combined with the fact that as more volume shifts to v3, the profit opportunities on v2 decline.
A large chunk of v2 liquidity is from incentivized pools, a use case which has not yet been enabled on v3, though there are efforts underway to remedy this.
The TVL of the top 5 v3 pools has continued to grow steadily since launch. This did however accelerate near the end of May, presumably as some larger yield seekers transitioned to a v3-focused strategy.
Source: Flipside
Uniswap v3 facilitates multiple fee tiers which are defined on a per-pool basis at instantiation (along with tick spacing). There have been many pools created across the different fee tiers, but he majority of revenues have been collected at the .3% fee tier.
Source: Dune
Uniswap continues to account for a lion’s share of ETH gas expenditures. This has been hovering around 25% of all gas costs (~56 ETH per hour) and ~40% of the top 20 gas spenders.
Source: Nansen
Though it was initially speculated that Uniswap v3 would consume more gas due to the increased computational cost of rebalancing and managing tick-level calculations, v2 has continued to lead in total gas expenditures.
Source: Etherscan
The largest bucket of these gas costs comes from the v2 router. A smaller chunk comes from the v3 swap router, which is roughly double the gas cost incurred by the NFT position manager contract for v3. It is somewhat difficult to reason about the appropriate ratio of gas cost paid by LPs for position management vs the gas cost paid by traders for swaps. Though it does appear clear that a tradeoff has been made. v3 generates more volume than v2, and much more fees per $ TVL. That said, LPs are spending a non-negligible amount on gas costs for position management.
Source: Nansen
The average TVL of the most traded-on pools in v3 is still mostly lower than the TVL of the comparable pools in v2. The main exception to this are the USDC-USDT pools, which have more TVL in v3 because it is just a significantly more viable use case in v3. Given the tight range of price spreads in stable-stable pools, the concentrated liquidity model makes Uniswap v3 far more viable for this type of activity than v2. The data from the first month of v3 activity, seems to back up this assumption.
Source: Flipside
USDC-WETH is the most heavily traded v3 pair, closely followed by WETH-USDT.
Source: Flipside
We can define capital efficiency as volume over TVL. The capital efficiency of the top 5 v3 pools is significantly higher on v3 vs v2. As mentioned, the data shows that v3 seems to be delivering on the promise of improved capital efficiency.
Source: Flipside
