Uniswap – Comprehensive Guide to Checking Uniswap Pair Prices

ammswapsuniswap

If I go to https://app.uniswap.org/#/add/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48/0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2/3000?chain=mainnet I can see liquidity details for USDC-DAI

It looks like this:

As far as I know, Uniswap is an constant product AMM so the liquidity inside should reflect the price
Based on the total value locked the price of ETH should be:
131.87m/91.43k which is 131000000.87/91000.43 and this is equal to 1439.55

What am I doing wrong, the correct price should be 2550.

Best Answer

You're mistaken, Uniswap v3 does not use the formula x*y=k for real amounts of assets. It's a concentrated liquidity AMM and uses a concentrated liquidity formula.

Read Uniswap v3 whitepaper. Specifically the formula 2.2 defines liquidity in v3. If you operate with virtual reserves of x and y then the relationship between price and liquidity (formulas 6.3 to 6.6) is the same as in v2. But virtual reserves x and y are not the same as the actual (real) token reserves in the pool, due to the concentrated liquidity feature.

Related Solutions

[Ethereum] Trying to make sense of Uniswap v3 fees (feeGrowthInside0LastX128, feeGrowthGlobal0X128)

There is a bunch of functions on the smart contract that explains how to use the liquidity field: In Uniswap V3 core repository, in Position.sol line 60:

// calculate accumulated fees
  uint128 tokensOwed0 =
     uint128(
        FullMath.mulDiv(
           feeGrowthInside0X128 - _self.feeGrowthInside0LastX128,
           _self.liquidity,
           FixedPoint128.Q128
        )
     );

This would translate to this in javascript, using bignumber.js

const tokensOwed0 = feeGrowthInside0LastX128
    .times(liquidity)
    .div(new bn(2).pow(128));
const tokensOwed1 = feeGrowthInside1LastX128
    .times(liquidity)
    .div(new bn(2).pow(128));

You may need to divide further by the decimals of the underlying ERC20

Uniswap – Calculating Token Price in Uniswap V3 Pool: Why Results Vary by Pool

It all depends if token0 is ETH or USDC. It should be:

if (token0 == WETH) {
    finalPrice = 1e12 * (sqrtPriceX96/2**96)**2;
} else {
    finalPrice = 1e12/(sqrtPriceX96/2**96)**2;
}

Best Answer

Related Solutions

[Ethereum] Trying to make sense of Uniswap v3 fees (feeGrowthInside0LastX128, feeGrowthGlobal0X128)

Uniswap – Calculating Token Price in Uniswap V3 Pool: Why Results Vary by Pool

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