TVL Approaching $200 Million! Uniswap v3 Officially Launched, What Should You Pay Attention to When Migrating Liquidity?

Uniswap announced earlier today on 5/6 that its v3 mainnet has officially launched. While the official had already disclosed all features and details in advance back in March, they have addressed potential user questions in the latest announcement. In addition to offering one-click migration of liquidity for v2 users, Uniswap also provides a service for migrating liquidity from SushiSwap, which previously launched a vampire attack on Uniswap.

Can I trade on v2?

The coin exchange platform of Uniswap, app.uniswap.org/, has been updated to v3, and trades will default to be executed on the v3 path. However, if v2 offers a better price rate, the platform will prompt a notification.

According to the announcement, as long as the Ethereum network is still operational, Uniswap v2 will continue to run. However, the advantages of v3 are expected to attract more liquidity funds and generate larger trading volumes, gradually phasing out v2.

Users can still view v2 data at v2.info.uniswap.org/.

Liquidity providers, LP

Previously, it was mentioned when introducing v3 that its LP tokens have been changed to NFTs. This is because v3 can set three different fee levels and custom price ranges for liquidity, meaning each LP token must have a different definition.

In addition, v3 will identify addresses that are liquidity providers for Uniswap v2 and Sushiswap to allow users to seamlessly migrate liquidity.

As shown in the image below, users can select a liquidity pool, adjust fees and price ranges, and click to migrate liquidity.

Migration of liquidity completed:

As mentioned earlier, v2 will continue to operate, and users can choose not to migrate liquidity. However, it is expected that v3 will bring in significant trading volume, which will be more beneficial for liquidity providers.

Currently no liquidity mining rewards

The official statement mentions that there are currently no plans, but the community can propose liquidity mining reward plans through governance processes at any time.

First Battle: Stablecoin Trading Protocol

When the v3 features were released earlier, many analysts pointed out that concentrating a large amount of liquidity within the market price range would significantly reduce slippage in trades. The advantage of low slippage could even compete with stablecoin trading protocols like Curve.

After the launch of v3, Uniswap founder Hayden Adams also shared a tweet on Twitter showcasing stablecoin trading on v3:

• Trading pair: DAI/USDC
• Trade amount: $5 million
• Difference: $5,420
• Slippage: 0.06%

Adams emphasized that this was only with $9 million in the liquidity pool. The liquidity distribution for this trading pair LP is as follows:

Of course, supporters of Curve also pointed out that for the same trading pair, Curve has lower slippage.

As of now, v2 data is as follows:

• Liquidity: $8.45 billion
• Trading volume: $1.45 billion

v3 data is as follows:

• Liquidity: $176 million
• Trading volume: $31 million

Uniswap officials also mentioned that there have been no issues found with v3 bug bounties in the past few weeks, but emphasized that v3 is a complex protocol, and it cannot be guaranteed that all errors have been resolved.