Uniswap V3 is Now the Past: The Next-Gen DEX Has Arrived
Decentralized exchanges are now gaining momentum in the crypto space, offering crypto holders highly-efficient ways to capitalize on their crypto assets. In the past few years, DEXs have become more convenient and sometimes even safer to use than classic, centralized exchanges. Where did it all begin? Where is the tipping point in DEX development, and what will be next?
DEX: Evolution or Revolution?
If you are into DeFi, you have probably heard about Uniswap – the project that once carved out a niche in the market. Later on, the legendary Uniswap V3 introduced concentrated liquidity, resulting in higher capital efficiency along with higher returns for traders and liquidity providers. With concentrated liquidity, providers received the right to allocate their capital to a preferred price interval. This was a huge moment, as crypto holders could now use their funds to the maximum extent and start earning by providing even small amounts of liquidity.
So far, Uniswap keeps the leading position among DEXs all around the valley. Nevertheless, this platform has always carried with it a big disadvantage – the risk of high impermanent loss due to static fees. Stepping closer to the future, the DEX that spiritually carries the status of Uniswap V4 has now solved these issues.
Algebra: Overtaking Uniswap V3?
The multi-solution DEX, Algebra – which is built on Polygon – has preserved and streamlined the concept of concentrated liquidity; adding up the unmatchable for now functionality. Let’s break it down further and spell out the innovative topping that brings Algebra on top of the list.
1. Dynamic Fees
Uniswap V3 features 3 pools so liquidity providers can’t predict the best one to add liquidity; they have to move liquidity between pools to get the highest fees.
Algebra offers only 1 pool with a dynamic fee model which calculates the fee depending on numerous factors; including the risk, volatility, trading and pools volume. This way, price slippage and impermanent loss are minimized.
2. Built-in Farming
Uniswap doesn’t have on-platform farming, so users have to apply to external smart contracts to farm tokens.
To improve this situation, Algebra has introduced built-in farming; allowing users to push their extra tokens to pools and earn rewards. You don’t need to access external platforms to farm and gain profit.
These are the main points pushing Algebra to the leading position on the market.
Crypto Farming As a New Source of Passive Income
Speaking of crypto farming, it has become a new trend among crypto investors wherein they can earn passive income with minimum time and maximum profit. Elaborating on that, Algebra farming events are massive – with huge APRs, up to 300%. Essentially, these farms are constantly updated, so you’ll have the opportunity to join in.
On March 25th, a new farming event opens. As pointed out, the approximate APR will reach 100% with USD 600,000 of maximum amount of liquidity locked. To participate, you need to join this farm just on time: provide liquidity to a $WETH / $USDC pool in advance, and enter starting from March 25th, 15:00 UTC to March 27th, 19:00 UTC. All the details on this farming event you can find right here: https://algebra.finance/farming/
Besides providing a passive income for every farmer, Algebra has reward fees – the extra earnings collected when liquidity within a custom price range is used. For instance, the current APR for WETH/USDC makes an extra 104% APR for providing liquidity.
With such game-changing features, liquidity providing becomes significantly more profitable, and Algebra gets huge opportunities to outrun Uniswap V3. As the project claims – they’re developing more big features. Could they take over Uniswap V3 and become the next-gen DEX, or have they done it already?
To decide on whether Algebra is the best fit for you or not, we have prepared the links to check out:
- Check out the 100% APR farming on Algebra: https://algebra.finance/farming/
- Algebra Website: https://algebra.finance/
- Algebra dApp: https://app.algebra.finance/#/farming/limit-farms
