FAQ
How is V2 pool and V3 pool different?
Liquidity providers could expect higher APRs when supplying their liquidity to V3 pools. The more concentrated the liquidity is supplied to narrower price ranges, the higher the expected APR. However, as liquidity becomes more concentrated, the potential size of impermanent loss accordingly increases.
What is fee tier and how does it work?
In V3 AMM DEX, liquidity providers have flexibility to adjust fees for liquidity pools based on their volatility and liquidity levels. For pools with higher volatility and lower liquidity, higher fees are likely to be set. In contrast,for more stable pairs with higher liquidity, liquidity providers may set lower fees. 0.05%/0.3%/1% fee tiers are available in Prixmswap now.
How are price ranges preset set? How do I set a custom price range?
Preset price ranges are set based on the price at the time of deposit and vary depending on the nature of the token pair (Volatile asset/Stable asset pair). Custom price ranges can be set based on user preferences, considering factors such price changes and risk tolerance.
What happens if the token price moves outside my position's price range?
If the token price moves outside the liquidity provider's price range, the LP's assets are swapped. LPs may not earn trading fees when the price moves outside of the selected price range.
How do I supply liquidity again if the price moves outside my liquidity supply price range?
Liquidity providers need to decide whether to wait for the price to return to the initial range or close the position and create a new in-range position.
Why is the deposit asset ratio is not 50/50, and how is the ratio determined?
Unlike V2 AMM DEX, the deposit ratio is determined by the current token price ratio and the minimum and maximum price ranges set when providing liquidity. If you select 'Full Range' when providing liquidity, it operates with the same logic as v2 AMM DEX.
How are rewards distributed to liquidity providers (LP)?
LPs receive rewards proportionate to their liquidity share in the pool. In detail, please refer to the fee structure page.
Why does the liquidity provision transaction fail?
This issue is more likely to occur when the supply range is wide, or the amount of liquidity to be supplied is small. With the exception of some extreme cases, minor adjustments to the slippage setting can resolve the issue, so please try with higher slippage settings. If not resolved, please send the error message by Prixmswap discord.
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