# Core Protocol v2 & v3 DEX ## Infinite Liquidity Range (v2) * The v2 DEX employs the constant product formula (x × y = k), which balances liquidity provision through automated protocols. * Liquidity providers contribute two assets in equal value to establish balanced pools, ensuring fair and efficient trading conditions. * Trades on v2 incur a 0.17% fee, which is distributed to LPs and automatically compounded into the position. This compounding mechanism enhances returns over time. * LP positions are represented by PLP tokens, which can be sent, traded or used in yield farming protocols for additional opportunities.

## Concentrated Liquidity (v3) * The v3 DEX introduces concentrated liquidity, enabling LPs to allocate their capital to specific price ranges rather than the entire price curve. This increases capital efficiency and yields. * The system supports multiple fee tiers (0.01%, 0.05%, 0.25%, 1%, and 2%), allowing LPs to tailor strategies to their specific needs and expected returns. Generated fees can be claimed at any time. * Single-asset contributions effectively act as limit orders that become active within the selected price ranges, offering sophisticated liquidity strategies and risk management. * This model reduces slippage and provides higher APYs for LPs by optimizing capital efficiency.