Crypto Newbie / Simulators / Uniswap V3
Uniswap V3 Simulator — Concentrated Liquidity
V3 lets LPs concentrate liquidity into a narrow price band — capital efficiency up to 4000× vs V2. The trade-off: you must monitor the position; if price exits the range, fees stop. Drag the handles below to set a range, move the price marker, see the histogram of other LPs in the pool.
Drag the green/red handles to change the range. Drag the black dot to simulate price moves.
Your position at $2,000
Capital efficiency vs V2
10.0×
Inside [1800, 2200], the same capital works 10.0× as hard as it would in V2. Narrower ranges = higher efficiency, but easier to fall out of range.
Enter exact numbers (or drag the chart handles above)
Try scenarios
30 days: V3 fees vs V2 fees
Each day, the ETH price moves randomly and there's swap volume. A V3 position only earns fees when the price is . A V2 LP always earns, but a much smaller share because liquidity is spread thin.
Days in range
28 / 30
Days out of range
2 / 30
V3 vs V2 (fees $)
+$1400
V3 (narrow range) total fees
$1478
Only counts days where price was in [1800, 2200]
V2 (full range) total fees
$77
Earns every day, but a tiny share per swap
📚 Key takeaway
V3 beats V2 by $1400 over 30 days because your range was wide enough to catch most days the price passed through. But push the range too far and V3 loses the edge.
V3 vs V2 — the core differences
V3 lets LPs choose a price range [Pa, Pb]. Their capital only works inside that band — but inside it, efficiency is up to 4,000× higher than V2. V3 positions are NFTs (ERC-721) instead of fungible ERC-20 LP tokens, and V3 offers three fee tiers (0.05% / 0.3% / 1%) instead of V2's single 0.3%.
When to use V3 instead of V2
V3 fits anyone able to rebalance ranges manually or via a bot. Stablecoin pairs (USDC/USDT) are ideal for V3 — price barely moves, so a tight 0.99–1.01 range earns fees with very low risk. Volatile pairs like ETH/USDC need wider ranges and active monitoring. Beginners are usually better off with V2 or an automated liquidity manager (Arrakis, Gamma) rather than raw V3.
Three fee tiers on V3 — which to pick?
0.05%: stablecoin pairs (USDC/USDT, DAI/USDC) — low volatility, high volume. 0.3%: blue-chip volatile pairs (ETH/USDC, WBTC/USDC) — the most common tier. 1%: exotic / long-tail pairs (small altcoins) — high volatility and high IL.
Frequently asked questions
+What is concentrated liquidity?
Unlike V2 where liquidity spreads from 0 to infinity, V3 lets each LP pick a price range [Pa, Pb]. Capital only works inside that range — in exchange, efficiency rises by tens to thousands of times.
+When does a position go out of range?
When the market price moves above Pb (max) or below Pa (min). The position then becomes 100% one of the two tokens and stops earning fees until price returns to the range.
+What is a tick in V3?
A tick is a discrete price unit — each tick corresponds to a 0.01% price difference (log base 1.0001). LPs place positions between two ticks. This simulator uses floating-point prices for clarity; production code uses integer ticks.
+Is V3 always better than V2 for LPs?
Not always. V3 demands active management — you must rebalance the range when price moves. Passive LPs often underperform V2 on V3 because they forget to rebalance. V3 only beats V2 if you (or a bot) stay on top of it.
+Narrow vs wide range — which to pick?
Narrow = high capital efficiency + frequent out-of-range. Wide = lower efficiency + less rebalancing. Pros use narrow ranges with bots. Beginners should pick wider ranges (±20–30% from spot).