v2 and v3

Last modified: April 16, 2026

Two versions of the protocol are deployed on-chain. Both are immutable — as long as the chain is operational, each version will continue to function. Developers and users are free to interact with whichever version suits their needs; the web app, wallet, and browser extension support both.

v2 launched in May 2020. It replaced the original single-pair-against-CTN model with direct ERC-20 ↔ ERC-20 pools, significantly broadening the range of tradable pairs. Liquidity is distributed uniformly across the full price curve (0 to ∞). Licensed under GPL.
v3, released in May 2021, introduced concentrated liquidity. Providers choose a price range for their capital rather than covering the entire curve, unlocking dramatically higher capital efficiency — at the cost of active management. Licensed as open source with modifications (BSL-1.1 transitioning to GPL).

Quantitative comparison

The core difference is capital efficiency. The table below compares a $10,000 deposit in a CTN/USDC 0.30 % pool, assuming $5 M daily volume and $2 M total in-range TVL.

v2: full-range position

Capital is spread from price 0 to infinity — multiplier is 1×.

Share of liquidity = $10,000 / $2,000,000 = 0.5 %
Daily fees = $5,000,000 * 0.003 * 0.005 = $75
Fee APR = $75 * 365 / $10,000 = 273.75 %

If CTN doubles (r = 2):

IL = 2 * sqrt(2) / (1 + 2) - 1 = −5.72 %
IL in dollars = $572

v3: concentrated position (± 25 % range)

Range $1,500–$2,500 at spot $2,000 gives a multiplier of ~4.4×. The $10,000 behaves like $44,000 of v2 liquidity.

Effective share = ($10,000 * 4.4) / $2,000,000 = 2.2 %
Daily fees = $5,000,000 * 0.003 * 0.022 = $330
Fee APR = $330 * 365 / $10,000 = 1,204.5 %

If CTN doubles (still within range):

IL = 5.72 % * 4.4 = 25.17 %
IL in dollars = $2,517

Side-by-side

Metric	v2	v3 (± 25 %)	v3 (± 10 %)
Capital efficiency	1×	4.4×	10.5×
Daily fee income	$75	$330	$788
Fee APR (gross)	274 %	1,205 %	2,876 %
IL at 2× price move	$572	$2,517	$6,006
Break-even time (fees vs IL at 2×)	7.6 days	7.6 days	7.6 days
Rebalancing needed?	No	Occasionally	Frequently
Management effort	None	Low	High

The break-even time is identical regardless of concentration — the multiplier amplifies fees and IL equally. The real differences are:

Higher absolute returns for the same capital (4.4× or 10.5× more fees).
Higher absolute risk — dollar losses during large price moves are proportionally larger.
Management overhead — tight v3 ranges exit the active region and stop earning, requiring rebalancing.

For the underlying formulas, see Concentrated Liquidity, Impermanent Loss, and LP Profitability.