Liquidity Mining ROI Simulator
Simulate Uniswap V3 concentrated liquidity returns with fee earnings and IL analysis
Position Configuration
🌊 What is Liquidity Mining?
Liquidity mining is the process of providing liquidity to decentralized exchanges (DEXs) in return for trading fees and rewards. In Uniswap V3, liquidity providers can concentrate their capital within custom price ranges, earning significantly higher fees but facing increased impermanent loss risk.
This calculator helps you simulate expected returns by analyzing fee earnings, impermanent loss, rebalancing costs, and comparing different strategies to optimize your position.
Key Features
💰 Fee Earnings
Calculate daily fees, APR, and volume share based on pool metrics and concentration
⚠️ Impermanent Loss
Analyze IL for concentrated liquidity positions including out-of-range scenarios
🔄 Rebalancing Costs
Track gas costs and rebalancing frequency to optimize your strategy
🎯 Strategy Comparison
Compare concentrated vs full-range vs HODL strategies side by side
📊 How Concentrated Liquidity Works
1. Price Range Selection
Unlike Uniswap V2 where liquidity is spread across all prices (0 to ∞), V3 allows you to concentrate liquidity within a specific price range. Tighter ranges earn more fees but increase IL risk.
2. Fee Tier Selection
Choose from 0.01%, 0.05%, 0.3%, or 1.0% fee tiers. Stable pairs (USDC/USDT) use 0.01%, while volatile pairs (ETH/USDC) typically use 0.3% or higher.
3. Active Management
When price moves outside your range, you stop earning fees. Active LPs rebalance positions to stay within profitable ranges, but this incurs gas costs and trading fees.
4. Capital Efficiency
Concentrated liquidity can provide 4,000x the capital efficiency compared to V2. A $10K position in a tight range can earn equivalent fees to a $40M V2 position.
💰 Choosing the Right Fee Tier
0.01% - Stablecoins
Best for: USDC/USDT, DAI/USDC
Extremely tight ranges (±0.05%) with high volume. Requires active monitoring and frequent rebalancing.
0.05% - Correlated Pairs
Best for: WETH/stETH, USDC/DAI
Low volatility pairs with occasional depegging. Moderate ranges (±5%) balance fees and risk.
0.3% - Standard Pairs
Best for: ETH/USDC, WBTC/ETH
Most popular tier for standard crypto pairs. Wide ranges (±20-50%) with good fee income.
1.0% - Exotic Pairs
Best for: New tokens, low-cap alts
High volatility and low liquidity. Very wide ranges (±100%) to compensate for extreme IL risk.
🎯 Liquidity Mining Strategies
📌 Passive (Set & Forget)
Wide price ranges (±50-100%) with no rebalancing. Best for long-term holders who accept lower fee income for minimal management.
Pros: No gas costs, no time commitment | Cons: Low capital efficiency, minimal fees
🔄 Active (Weekly Rebalancing)
Moderate ranges (±20-30%) with weekly repositioning. Balanced approach for semi-active LPs seeking good returns without constant monitoring.
Pros: Higher fees than passive | Cons: Gas costs, requires regular attention
⚡ Aggressive (Daily Rebalancing)
Tight ranges (±5-10%) with daily or automated rebalancing. Maximum capital efficiency for professional market makers and bots.
Pros: 10-100x fees of passive | Cons: High gas costs, significant time/automation required, extreme IL risk
✅ Best Practices for LPs
- ✓Start wide, narrow gradually: Begin with wider ranges to understand the pair's volatility before concentrating capital
- ✓Match range to volatility: Stable pairs = tight ranges (±2-5%), volatile pairs = wide ranges (±30-50%)
- ✓Monitor pool metrics: Track TVL, volume, and your share daily. If volume drops 50%, consider moving to another pool
- ✓Rebalance on L2s: Use Arbitrum, Optimism, or Base where gas costs are 10-100x cheaper than Ethereum mainnet
- ✓Set price alerts: Get notified when price approaches range boundaries to rebalance before going out of range
- ✓Calculate break-even: Ensure your expected fee APR exceeds potential IL + gas costs before entering
🔗 Related Tools
❓ Frequently Asked Questions
What's the minimum capital for liquidity mining?
On Ethereum mainnet, you need at least $10K-20K to justify gas costs. On L2s (Arbitrum, Optimism), you can start with $1K-2K due to lower fees.
How often should I rebalance my position?
Depends on your range width and gas costs. For tight ranges (±10%), rebalance weekly. For wide ranges (±50%), monthly or when price exits range. On L2s, you can rebalance more frequently.
Can I lose more than I invest?
No, you cannot lose more than your initial capital through impermanent loss. The maximum loss is your full investment (if token goes to zero), but this is the same risk as simply holding the tokens.
What's a good fee APR to aim for?
Stablecoin pools: 5-15% APR. ETH/USDC: 15-40% APR. Volatile pairs: 40-100%+ APR. Always ensure fee APR significantly exceeds expected IL to achieve net positive returns.
Should I use Uniswap V2 or V3?
V3 for active management and higher returns. V2 for truly passive "set and forget" if you never want to rebalance. Most LPs prefer V3 for its capital efficiency despite added complexity.