Multiple Protocol x Uniswap V3: The Smartest Integration to Allow LPs & GPs to Earn Smart!
Ever since the release of Bitcoin Whitepaper, people have gradually started recognizing and realizing the true potential of decentralization. The introduction of Smart Contracts through Ethereum Whitepaper was another advancement of decentralization that advanced the virtual/encrypted finance model, known as decentralized finance. Decentralization and disruption of the traditional financial model alone were not enough for building a sustainable DeFi space. Thus, gradual developments and innovations led to the advancement of DeFi of today. However, various unique challenges still keep surfacing, preventing investors, users, traders, and liquidity providers from having a seamless DeFi experience.
Multiple Protocol considers all the existing challenges of the DeFi industry. To offer users the best experience and reduce challenges, Multiple Protocol integrated with the freshly launched Uniswap V3, the latest version of Uniswap protocol with unique and unparalleled DeFi concepts to enhance yields.
Introducing Uniswap V3
Uniswap, one of the most prominent ETH native smart contract protocols that allow automated crypto swaps and transactions in pairs, uses an automated market maker (AMM) algorithm to facilitate trading. This protocol utilizes the deposited liquidity that LPs offer in pairs of tokens and withdraws the asked token from the pool. To complete this process, Uniswap charges a pre-set swap fee.
The latest Uniswap V3 has introduced various amazing features that advance LPs’ DeFi game and simplify it for all. It comprises multiple fee tiers as per the risk level for providing liquidity. The protocol collects liquidity in pairs for a specific pool that is not invested back into the same pool. Though Uniswap’s current protocol fee is 0%, the protocol can apply a protocol fee on the $UNI (Uniswap native token) token holders in the future.
Multiple Protocol offers an elegant enhancement of new Uniswap V3 features with smarter solutions that allow expert traders (GP) to provide professional AMM liquidity strategies and benefit users (LP) from the best yielding products.
Learn More About Uniswap
The concept of a Concentrated Liquidity market maker or CLMM is more efficient than the previously famous constant product market maker (CPMM) algorithm in multiple ways. The latter allows users to choose a range of prices for providing liquidity. If the price moves outside the pool range, it becomes inactive, impacting the following swap process. However, in V3, LPs can concentrate their capital to smaller price intervals and create customized/individualized price curves that reflect the preferences of each LP.
When one performs a swap against a pool, it impacts the ratio of the tokens in the pool. The ratio of the poll, while the swap begins, changes after the swap is complete. This change in the ratio of tokens is called price impact on the swap. While this process might be confusing for many, V3 has simplified the calculation for all the DeFi-savvy, averagely DeFi-savvy, or for all n general. With V3, for 1 $ETH you get 99.0099 $UNI. It means the ratio of tokens in the pool is changing, but the product of the amount of tokens remains the same.
Users can execute transactions with higher gas fees before transactions with lower fees using V3. Predicting the exact and specific point in time of transactions is not possible, whereas the chances of a change in the state of the pool between the transaction broadcast and execution are often high. These changes and fluctuation of the state of the pool cause price changes for the swap than predicted, which is called slippage.
There is always some embedded risk intact with providing liquidity. The ratio of tokens in the pool keeps changing as per the ongoing market price. Thus, LPs need the help of a professional Portfolio Manager to constantly check and rebalance the portfolio as per the market trend/price changes. This rebalancing is not only expensive but also risky for LPs. V3 addresses this impermanent loss in a smarter way, a simple formula where the state of the pool is calculated using 2 equations.
With Uniswap V3 smart features and our solutions, Multiple Protocol will be able to allow capital efficiency, a more sophisticated dashboard, separate earnings for LPs and GPs, and more.
Multiple Protocol TVL has already crossed ATH of $6.3 Million with 4000x capital efficiency for our LP & GPs. Have you joined the Multiple Protocol Alpha Mainnet yet? If not, join now:
Multiple Protocol Beta launch is coming soon with exciting features like never before. So, stay tuned!
About Multiple Finance
Multiple Protocol is a Decentralized Finance (DeFi) protocol based on Ethereum that allows expert traders (GP) to provide professional AMM liquidity strategies, which in turn ensures users (LP) securely benefit from the best yielding products.