> For the complete documentation index, see [llms.txt](https://docs.sonus.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.sonus.exchange/dex-related/v3-concentrated-liquidity-amm.md).

# V3 - Concentrated Liquidity AMM

Concentrated Liquidity is, currently, the most efficient and profitable method of market making that on-chain decentralized exchanges have access to. This was popularized and took the space by storm when Uniswap released their UniV3 model.\
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To make it very clear the efficacy differential between x\*y=k (uniV2) and UniV3's orderbook-style AMM-- it needs to be explained that typical LP positions operate on a **(0,∞) range**.\
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This means that each individual user in the pool is subject to providing liquidity in every possible positive real-number. \
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Since every trade has to consider this when the swapping algorithms are ran, $100,000 of liquidity spread from 0 to ∞ is exponentially less efficient than, say, one with a defined range of ($1,000-$1,100). \
With the latter example of the $1,000-$1,100 liquidity range, it is calculatable that the same $100,000 of liquidity is now concentrated in a $100 price range, providing an **EXTREMELY efficient swapping experience**. Providing the lowest slippage currently feasible within the DeFi space.