Uniswap V4 Liquidity Pools

Dexodus leverages the advanced capabilities of Uniswap V4 to power its liquidity pools, providing users with enhanced capital efficiency and improved trading experiences. This section details the key features and benefits of using Uniswap V4's concentrated liquidity model, including concepts such as tick spacing, tick lower, and tick upper.

Concentrated Liquidity

Uniswap V4 introduces the concept of concentrated liquidity, allowing liquidity providers (LPs) to allocate their capital within specific price ranges. This innovation significantly enhances capital efficiency, as liquidity is no longer spread thinly across the entire price spectrum.

Key Benefits

• Higher Capital Efficiency: LPs can concentrate their liquidity around the most active trading ranges, increasing their potential returns.

• Reduced Slippage: With more liquidity concentrated around key price points, traders experience less slippage during trades.

• Dynamic Fee Structure: Uniswap V4 allows for multiple fee tiers, enabling LPs to choose the fee structure that best suits their risk tolerance and market conditions.

Tick Spacing

Tick spacing is a crucial parameter in Uniswap V4 that defines the granularity of the price range within which liquidity can be provided. Each tick represents a fixed price interval, and LPs can choose to provide liquidity at specific ticks.

Tick Lower and Tick Upper

The tick lower and tick upper parameters define the specific price range within which an LP is willing to provide liquidity. By setting these parameters, LPs can control where their capital is most effectively utilized.

How Dexodus Utilizes Uniswap V4

Dexodus integrates Uniswap V4 pools to provide liquidity for its perpetual and spot trading products. By leveraging Uniswap V4's concentrated liquidity model, Dexodus ensures that liquidity is deep and efficiently utilized, benefiting both traders and liquidity providers.

Liquidity Provision on Dexodus

• Adding Liquidity: LPs can add liquidity to Uniswap V4 pools on Dexodus by specifying their desired price range (tick lower and tick upper) and the amount of tokens they wish to provide.

• Removing Liquidity: LPs can remove their liquidity at any time, reclaiming their capital along with any accrued fees.

• Adjusting Liquidity: LPs can adjust their liquidity positions based on market conditions, ensuring their capital is always optimally deployed.