How Liquidity Providing on Homora’s Uniswap V3 pools differs from other AMM pools

After understanding what new concepts have been introduced on Uniswap V3 and how they affect Homora V2, now it’s time to explore what are the implications of those changes to leveraged liquidity providers on Homora.

Benefits from LPing on Uniswap V3 pools

Homora V2’s liquidity providers will earn the same benefits as Uniswap V3’s liquidity providers of getting a higher flexibility and capital efficiency at an amplified spectrum if users choose to take on leverage.

Higher Capital Efficiency & Flexibility

Homora V2’s leveraged liquidity providers can achieve higher flexibility when providing liquidity on Uniswap V3 by being able to select a custom recommended active price ranges based on their risk appetite. Also, leveraged liquidity providers are able achieve higher capital efficiency by either
  • Earning higher APR with the same amount of initial capital (as they share a higher proportion of the pool)
  • Earning same APR with the lower amount of initial capital (which means the remaining capital can be put to use somewhere else e.g. for the purpose of diversifying investment portfolio and managing risks)
The narrower the price range, the higher the level of capital efficiency.
The table below shows the statistics determining the level of capital efficiency achieved when opening a liquidity providing position at different provided price ratios:
Price ratio
Level of Capital Efficiency
3.14 times
5.45 times
8.13 times
2000 times
4000 times
10000 times