Wow Liquidity Pool

Classic V3 liquidity pools provide users with “concentrated liquidity” and multiple fee tiers. However, these tiers are fixed; if we want to change them, we need to deploy a new V3 contract and have users migrate their liquidity.

At SquadSwap, we’ve retained the advantages of V3’s multiple fee tiers while making them adjustable, creating the Wow Liquidity Pool (Changeable V3) model.

Classic V3 Liquidity Pool

Overview

• Multiple Fee Tiers: For example, 0.01%, 0.05%, 0.25%, or 1%, chosen when adding liquidity.

• Concentrated Liquidity: Users can specify a price range for their liquidity, earning higher yield as long as the price remains in this range.

Advantages

• Concentrated Liquidity: More efficient capital utilization compared to Classic V2.

• Choice of Fee Tiers: Users can select a rate that matches their risk/reward preferences.

Disadvantages

• Fixed Tiers: They cannot be changed on the fly; each new rate requires a new contract.

Wow Liquidity Pool (Changeable V3)

Wow Liquidity Pool preserves the multiple fee tiers and concentrated liquidity benefits of Classic V3, while allowing fee rates to be adjusted without deploying new contracts.

How It Works

1. Multiple Fee Tiers + Adjustable Rates: Similar to Classic V3 with four different tiers (e.g., 0.01%, 0.05%, 0.25%, 1%), but each can be updated.

2. Concentrated Liquidity: Users can choose a price range in which to concentrate their liquidity.

3. No Migration Required: When fee tiers change, users keep their liquidity in place and continue earning under the new rates. (Except for the first migration. When we roll out the new feature, liquidity providers must migrate their existing liquidity to the new contract once.)

Advantages

1. High Flexibility: Tier rates can be instantly adjusted based on market conditions or competitive factors.

2. Increased Trading Volume Potential: Competitive fee rates can attract more traders and aggregators.

3. User-Friendly: Maintains Classic V3’s earning strategies without the hassle of migration when fees change.

Benefits for Users

1. Variety of Fee Tiers: Choose which tier suits your strategy and deposit liquidity accordingly.

2. Strategic Adjustments: Quickly benefit from updated rates whenever the platform decides to change them.

3. No Lost Rewards: Unclaimed rewards accrued prior to a fee tier change remain intact; new rates apply going forward.

Fee Tier Boundaries

In the Wow Liquidity Pool (Changeable V3), there are four fee tiers, each with minimum and maximum rate boundaries:

1. Lowest Fee Tier

   1. Minimum: 0.0001%

   2. Maximum: 0.03%

2. Low Fee Tier

   1. Minimum: 0.031%

   2. Maximum: 0.15%

3. Medium Fee Tier

   1. Minimum: 0.151%

   2. Maximum: 0.625%

4. High Fee Tier

   1. Minimum: 0.626%

   2. Maximum: 10%

These ranges accommodate a wide array of risk/return profiles for different users and enable the platform to remain competitive by adjusting fees as needed.