Adapting Proportional Liquidity Mining to Uniswap v3
Summary
The document explains how to adapt the incremental reward accounting used for Uniswap v1 and v2 to Uniswap v3’s concentrated liquidity. In earlier versions, a staking contract tracks a cumulative reward-per-liquidity value as users enter or leave. Each provider’s reward follows from their liquidity balance and the change in that accumulator since their last checkpoint.
In v3, a position earns rewards only while the pool price is within its chosen tick range. The approach uses the pool’s global seconds-per-liquidity accumulator and tick-level outside accumulators to calculate seconds-per-liquidity inside a range. A staking contract snapshots this value at deposit and withdrawal, then uses the difference to allocate rewards based on active liquidity. The method can support multiple simultaneous incentives in one contract and indirectly favors concentrated, active liquidity.
The article describes two limits: incentive cutoffs are approximate for users who remain staked after a program ends, and unstaked active liquidity can still receive an unclaimed share of rewards. A creator can set a deadline to recover unclaimed tokens. The proposal is an accounting design, not evidence of measured trading performance.
Key ideas
- A cumulative reward-per-liquidity accumulator enables incremental, proportional payouts without tracking every time interval.
- Uniswap v3 tick data can determine how long liquidity was active inside a position’s price range.
- Rewarding active virtual liquidity indirectly favors providers who concentrate liquidity near the current price.
- Multiple incentives can use the same staked position through a shared staking contract.
- Program end times and unstaked liquidity create accounting compromises that may leave rewards unclaimed.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.