Uniswap v3-core is the core smart contracts for the Uniswap v3 protocol, a decentralized exchange (DEX) on the Ethereum blockchain. It introduces concentrated liquidity, allowing liquidity providers to allocate their capital within specific price ranges, potentially increasing capital efficiency and reducing slippage for traders.

Pros

• Improved capital efficiency through concentrated liquidity
• Flexible fee tiers for different trading pairs
• Enhanced price oracle functionality
• Increased customization options for liquidity providers

Cons

• Higher complexity compared to previous versions
• Potential for increased gas costs in certain scenarios
• Steeper learning curve for users and developers
• Risk of impermanent loss still present, potentially amplified in some cases

Code Examples

1. Creating a new pool:

function createPool(
    address tokenA,
    address tokenB,
    uint24 fee
) external noDelegateCall returns (address pool) {
    require(tokenA != tokenB);
    (address token0, address token1) = tokenA < tokenB ? (tokenA, tokenB) : (tokenB, tokenA);
    require(token0 != address(0));
    int24 tickSpacing = fee2tickSpacing[fee];
    require(tickSpacing != 0);
    require(getPool[token0][token1][fee] == address(0));
    pool = deploy(address(this), token0, token1, fee, tickSpacing);
    getPool[token0][token1][fee] = pool;
    getPool[token1][token0][fee] = pool;
    emit PoolCreated(token0, token1, fee, tickSpacing, pool);
}

This function creates a new Uniswap v3 pool for a given pair of tokens and fee tier.

2. Adding liquidity to a pool:

function mint(
    address recipient,
    int24 tickLower,
    int24 tickUpper,
    uint128 amount,
    bytes calldata data
) external override lock returns (uint256 amount0, uint256 amount1) {
    require(amount > 0);
    (, int256 amount0Int, int256 amount1Int) = _modifyPosition(
        ModifyPositionParams({
            owner: recipient,
            tickLower: tickLower,
            tickUpper: tickUpper,
            liquidityDelta: int256(amount).toInt128()
        })
    );

    amount0 = uint256(amount0Int);
    amount1 = uint256(amount1Int);

    uint256 balance0Before;
    uint256 balance1Before;
    if (amount0 > 0) balance0Before = balance0();
    if (amount1 > 0) balance1Before = balance1();
    IUniswapV3MintCallback(msg.sender).uniswapV3MintCallback(amount0, amount1, data);
    if (amount0 > 0) require(balance0Before.add(amount0) <= balance0(), 'M0');
    if (amount1 > 0) require(balance1Before.add(amount1) <= balance1(), 'M1');

    emit Mint(msg.sender, recipient, tickLower, tickUpper, amount, amount0, amount1);
}

This function allows liquidity providers to add liquidity to a specific price range in a Uniswap v3 pool.

3. Swapping tokens:

function swap(
    address recipient,
    bool zeroForOne,
    int256 amountSpecified,
    uint160 sqrtPriceLimitX96,
    bytes calldata data
) external override noDelegateCall returns (int256 amount0, int256 amount1) {
    require(amountSpecified != 0, 'AS');

    Slot0 memory slot0Start = slot0;

    SwapCache memory cache = SwapCache({
        liquidityStart: liquidity,
        blockTimestamp: _blockTimestamp(),
        feeProtocol: zeroForOne ? (slot0Start.feeProtocol %