Uniswap V3 is a decentralized exchange (DEX) built on the Ethereum blockchain that allows users to trade various tokens directly from their wallets. It improves upon earlier versions with enhanced features for liquidity providers and traders.One of the key innovations in Uniswap V3 is concentrated liquidity. Rather than spreading their funds across the entire price range, liquidity providers can choose specific price ranges where they want to allocate their liquidity. This allows them to earn higher fees while reducing capital inefficiency.Additionally, Uniswap V3 introduces flexible fee tiers, enabling liquidity providers to set different fees based on the asset pair’s volatility. This change helps to align risk and reward more effectively.The protocol also employs non-fungible tokens (NFTs) to represent liquidity positions, adding a unique twist to how liquidity is managed and traded. Overall, Uniswap V3 enhances user experience and efficiency in trading and liquidity provision, making it a popular choice for many users looking for decentralized trading solutions.