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Comparison of liquidity distribution between Uniswap V3 and curve V2

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In the last article, we theoretically deduced why the slippage of uniswap V3 is smaller than that of curve, but another question that what is the actual liquidity distribution of the two protocal? When adding liquidity to uniswap, we can see the following liquidity distribution diagram.

https://preview.redd.it/knx9vqdpyk691.png?487&format=png&auto=webp&s=4207b7bb73d180dd8da31d4b5356a2a9d6f1eebe

What would the liquidity distribution of the curve V2 look like? We know that the liquidity of curve V2 is mainly concentrated near the price equilibrium point in order to reduce the slippage , but meanwhile to ensure unlimited liquidity, the liquidity distribution of curve V2 have to show a sharp normal distribution graph as shown in the figure below. However, the liquidity distribution of uniswap V3 is relatively flat ranging from -50% to 150% of the current price, as a result uniswap V3 can provide low slippage in a large price range, while curve V 2 only shows low slippage in a very narrow range ofΒ±5% of the current price, once beyond the peak range, the slippage increases dramatically.

https://preview.redd.it/nm6n0hrqyk691.png?563&format=png&auto=webp&s=95ed17e50d16eeac50e5508885d364c22e4bf9fe

More importantly, the liquidity distribution of curve V2 depends on the internal oracle, so it changes passively, while the liquidity distribution of uniswap V3 changes actively because any external price changes will be fed back to uniswap V3 in real time.

https://x3finance.medium.com/comparison-of-liquidity-distribution-between-uniswap-v3-and-curve-v2-20a69efb8c19

submitted by /u/x3finance
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