It was March 25, I was sitting in my room working when one of my colleagues came excitedly telling me about Uniswap v3 and how it’s a gamechanger for liquidity providers.
He started explaining the concept of concentrated liquidity.
While he was explaining it, the idea of Unipilot clicked.
A protocol built upon Uniswap v3 that allows liquidity providers to optimize their liquidity position so they don’t have to.
To better understand concentrated liquidity let’s take an example.
Alice and Bob both want to provide liquidity in an ETH/DAI pool on Uniswap v3. They each have $1m. The current price of ETH is 1,500 DAI.
Alice decides to deploy her capital across the entire price range (as she would have in Uniswap v2). She deposits 500,000 DAI and 333.33 ETH (worth a total of $1m).
Bob instead creates a concentrated position, depositing only within the price range from 1,000 to 2,250. He deposits 91,751 DAI and 61.17 ETH, worth a total of about $183,500. He keeps the other $816,500 himself, investing it however he prefers.
While Alice has put down 5.44x as much capital as Bob, they earn the same amount of fees, as long as the ETH/DAI price stays within the 1,000 to 2,250 range.
It’s clear that Bob is the real winner here, Unipilot allows everyone to become Bob and even better than Bob.
When you come on Unipilot and want to provide liquidity, we will suggest to you the most optimal range to provide liquidity in.
Please note that this range will keep changing based on the price movements of assets.
Currently, in the manage tab, you can see which liquidity is active and if it’s inactive, on one click you will be able to switch liquidity on the current most optimized liquidity position.
Provide liquidity with just one token.
Unipilot also allows you to provide liquidity with just one token.
Want to put liquidity in ETH/DAI but just have DAI?
No problem, just use DAI to provide liquidity. We will do all the heavy lifting for you.
Stay tuned for our next article in which we explain the technical aspect of Unipilot.