# Concentrated Liquidity

Biscotti's primary AMM is a full deployment of **Uniswap V3** — the
concentrated liquidity market maker. Instead of spreading capital across the
entire price curve `(0, ∞)` like a classic AMM, each liquidity provider
chooses a **price range** and concentrates capital where trading actually
happens.

## Why it matters

| | Classic AMM (V2) | Concentrated liquidity (V3) |
| --- | --- | --- |
| Capital deployment | Entire curve `(0, ∞)` | LP-chosen range `[Pa, Pb]` |
| Capital efficiency | Baseline | Up to 4000× at tight ranges |
| Fee earnings | Proportional to pool share | Proportional to **in-range** liquidity share |
| Position token | Fungible ERC-20 LP | **NFT** (unique per range) |
| Fee tiers | One | 0.05% / 0.30% / 1.00% |

The result: traders get deeper effective liquidity (less price impact), and
LPs earn more fees per dollar deposited — at the cost of actively choosing and
maintaining a range.

## Core mechanics

* **Ranges & ticks** — prices are discretized into ticks; a position provides
  liquidity between a lower and an upper tick. While the market price is
  inside your range, your capital earns fees; outside it, your position sits
  idle in a single asset. Details in
  [Ticks & Price Ranges](/concentrated-liquidity/ticks-and-ranges).
* **Fee tiers** — each pair can have several pools at different fee levels
  suited to its volatility. Details in
  [Fee Tiers](/concentrated-liquidity/fee-tiers).
* **NFT positions** — because every position has its own range, positions are
  non-fungible. The `NonfungiblePositionManager` mints an NFT that represents
  your position and collects your fees. Details in
  [Managing Positions](/concentrated-liquidity/managing-positions).

## Earning on top: V3 Farms

Deposit your position NFT into [MasterChefV3](/farms/v3-farms) to earn BSCT
emissions on top of trading fees. Rewards are weighted by your share of
deposited liquidity in the pool.

## Deployed contracts

The full V3 suite is live on ARC Testnet:

| Contract | Purpose |
| --- | --- |
| `UniswapV3Factory` | Creates one pool per `(token0, token1, fee)` |
| `NonfungiblePositionManager` | Mints/manages position NFTs, collects fees |
| `SwapRouter` | Direct V3 swap execution |
| `QuoterV2` | Off-chain quote simulation |
| `TickLens` | Batch tick data reads |

Addresses and full API in the
[Contract Reference](/concentrated-liquidity/contracts).

:::tip[New to concentrated liquidity?]
Start with [Ticks & Price Ranges](/concentrated-liquidity/ticks-and-ranges) —
everything else builds on those two concepts.
:::