V2 vs V3 Pools
Understanding the differences between V2 and V3 liquidity pools on AchSwap.
Overview
AchSwap supports two AMM models:
| Feature | V2 | V3 |
|---|---|---|
| Liquidity Type | Full Range | Concentrated |
| Fee Tiers | Single (0.3%) | Multiple (0.01% - 10%) |
| Position Format | LP Tokens | NFT Position |
| Capital Efficiency | 1x | Up to 100x |
| Complexity | Simple | Advanced |
V2 Pools (Classic AMM)
How V2 Works
V2 uses the classic xy=k formula:
- Liquidity distributed evenly across all prices
- Any price can be traded
- Simpler to understand and manage
Advantages
- Simplicity - No need to manage price ranges
- No Range Risk - Always earning fees
- Easy Tracking - Single LP token position
Disadvantages
- Lower Returns - Capital spread thin
- Lower Capital Efficiency - Same fees on less capital
V3 Pools (Concentrated Liquidity)
How V3 Works
V3 allows concentrating liquidity:
- Choose a specific price range
- Earn more fees when price is in range
- More complex but higher returns
Advantages
- Higher Returns - Concentrated fees
- Capital Efficiency - Same returns on less capital
- Custom Strategies - Multiple positions possible
Disadvantages
- Range Risk - No fees if price moves out
- Complexity - Requires active management
- More Transactions - May need to adjust range
When to Use V2
Best For
- New liquidity providers
- Long-term passive LPing
- Token pairs with low volatility
- When you don't want to manage positions
Example
You want to LP USDC/ACHS for 6 months:
- Use V2
- Deposit and forget
- Earn 0.3% on all trades
When to Use V3
Best For
- Experienced LPing
- High-volume trading pairs
- Active position management
- Maximizing returns
Example
You're an active trader:
- Add 50x concentrated position
- Monitor price daily
- Adjust range as needed
Migration Between Versions
From V2 to V3
You can migrate V2 positions to V3:
- Go to Add Liquidity → V2 tab
- See your existing positions
- Click Migrate
- Set V3 parameters
- Confirm
Migration is one-click but you set your V3 parameters.
Maintaining Both
You can have positions in both:
- V2 for stability
- V3 for returns
- Diversify your LP strategy
Returns Comparison
V2 Example
Deposit: $1,000 USDC + 2,500 ACHS
Annual Volume: $100,000
Your Share: 1%
Annual Fees: $300 (0.3% × $100,000)
APY: 30%
V3 Example
Same deposit, 10x concentrated:
Deposit: $1,000 USDC + 2,500 ACHS
Annual Volume: $100,000
Your Share: 1% (within range)
Concentration: 10x
Effective Annual Volume: $1,000,000
Annual Fees: $3,000
APY: 300%
Note: Actual returns depend on price staying in range
Recommendation
| User Type | Recommendation |
|---|---|
| Beginner | Start with V2 |
| Passive | V2 is fine |
| Intermediate | Try V3 with wide range |
| Advanced | V3 with active management |
Conclusion
Both V2 and V3 have their place:
- V2: Simple, stable, low maintenance
- V3: Complex, higher returns, active management
Start with V2 to learn, then graduate to V3.