SushiSwap Rolls Out V3 Liquidity Pools to Enhance Capital Efficiency

The development marks the most extensive deployment of these types of pools to date, the exchange said Thursday


Ground Picture/Shutterstock modified by Blockworks


Decentralized exchange SushiSwap has launched concentrated liquidity pools, V3, across more than a dozen networks in a move aimed at boosting capital efficiency across the sector.

The development marks the most extensive deployment of these types of pools to date, the exchange said in a statement on Thursday.

Intended to be capital efficient, the pools are expected to enable liquidity providers (LPs) to further concentrate their funds in a narrower price range. 

A reduced spread between buy and sell orders is the result, which in turn should lower slippage for traders and allow for more accurate trade execution, increased trading volume and better liquidity, ultimately benefiting LPs with higher profits.

SushiSwap‘s V3 is now live across 13 networks, including Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism and Polygon.

In the coming weeks, SushiSwap said it would also roll out support for 30 more concentrated liquidity networks in a “two-phase” approach.

The first phase, marked by today’s launch, will also involve deploying SushSwap’s exchange to zero-knowledge rollups sometime in the near future, per the statement. 

Zero-knowledge rollups are a layer-2 scaling solution for blockchain networks, aiming to increase throughput and reduce transaction costs. They work by bundling or “rolling up” multiple transactions off-chain into a single proof, called a zero-knowledge proof.

In phase 2, Sushi intends to introduce a rewards program for the most efficient LPs, allowing them to earn the exchange’s native token, SUSHI. The program will initially launch on Ethereum, Arbitrum, Optimism and Polygon, with plans to expand to more chains as they are added.

In an attempt to revamp its tokenomics and boost user confidence, SushiSwap adopted rival Uniswap’s latest automated market maker module late last month, following the expiration of its business source license protection. The move has been accepted by industry pundits as an attempt to further “scale growth” and boost capital efficiency.

SushiSwap continues to dust itself off following an exploit in April in which a bug in the exchange’s Route Processor 2 saw its smart contract drained for $3.3 million.

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