Position ownership: LP tokens and NFTs
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Every position is represented by an on-chain asset held in the provider's wallet. Owning that asset confers full control: the holder can add or remove capital, collect fees, or transfer ownership by sending the asset to another address.
v2: LP tokens
When capital is deposited into a v2 pool, the contract mints fungible LP tokens to the provider's wallet. The token balance is proportional to the provider's share of the pool. Burning these tokens (via the remove-liquidity flow) redeems the underlying assets plus any accrued fees.
v3: NFTs
v3 positions are non-fungible — each position has unique bounds, fee tier, and accumulated fee state — so the protocol represents them as ERC-721 NFTs. The NFT is minted when the position is created and stores all position-specific data:
| Field | Purpose |
|---|---|
nonce | Permit nonce for gasless approvals |
operator | Address authorised to manage the position (zero by default) |
token0 / token1 | Contract addresses of the pooled pair |
fee | Fee tier of the pool |
tickLower / tickUpper | Price-range boundaries |
liquidity | Amount of liquidity committed |
feeGrowthInside0LastX128 / feeGrowthInside1LastX128 | Per-unit fee accumulators for token0 and token1 |
tokensOwed0 / tokensOwed1 | Pending fee balances claimable by the owner |
Transferring the NFT to another wallet transfers full ownership of the position and its uncollected fees.