AMM

SushiSwap is a decentralized exchange protocol originally forked from Uniswap, sharing its core Automated Market Maker (AMM) design.

V2: Decentralized Liquidity Pools

V2 is a decentralized exchange protocol that enables token swaps using automated liquidity pools.

Automated Market Maker (AMM): Trades occur through smart contracts, with users providing liquidity by depositing token pairs.
Constant Product Formula: Maintains pool balance using the formula x * y = k.
Fee Structure: A 0.30% trading fee is distributed to liquidity providers (LPs).
Token Pair Swaps: Facilitates ERC-20 to ERC-20 token swaps seamlessly.

V2 introduced a simple, reliable way to trade tokens in a decentralized manner.

V3 enhances the decentralized exchange experience by introducing more flexibility and efficiency for liquidity providers and traders.

Concentrated Liquidity: Allows LPs to allocate capital to specific price ranges for improved efficiency.
Custom Fee Tiers: Offers different fee levels (e.g., 0.05%, 0.30%, 1.00%) tailored to market conditions.
Active Position Management: LPs can dynamically manage their positions for optimized returns.
NFT-Based Positions: Each liquidity position is represented as a non-fungible token (NFT), this makes every position unique and transferable.

V3 is designed to offer advanced tools for more precise and efficient liquidity management.