1/ In our last tutorial, we touched on how v3 works. But here’s what most LPs don’t get told: the good, the bad, the hidden risks, and the solutions to manage them. Let’s break it down 👇 #TheRealDeFiBreakdownSeries

2/ What is v2? v2 is the classic AMM. You deposit 50/50 tokens into a pool, and your liquidity is spread evenly across all prices, kinda like placing bets from scale 0 to 10 (following our last tutorial). ✅ Passive ✅ Easy ❌ Inefficient — most of your capital just sits idle.

3/ What is v3? v3 = concentrated liquidity. You choose a price range (e.g. scale 4–8) and bet that price will trade within it. ✅ Higher capital efficiency i.e. you put all your capital within the range you choose ✅ More fees (if you’re right) ❌ Requires active management

4/ So, what’s the catch? 📈 You need to understand market movements ⏳ You need to monitor your position 😬 You're still exposed to impermanent loss But the good news? There are tools to help. Let’s break it down 👇

5/ First: setting your range matters. Say you set ETH at $2,000–$2,800. If ETH pumps to $3,000? You go out of range = no fees earned. Solution? Active management. Adjust your range when needed.

6/ That’s why v3 is more hands-on. Price moves. So should your strategy. Some say this feels like trading. And they’re not wrong 😅 Not into active management? That’s where liquidity managers come in.