What is Uniswap v3 Liquidity Position NFT?

Uniswap v3 creates a new liquidity provider (LP) position wrapped in a NFT (ERC-721 tokens), unlike the fungible ERC-20 tokens in Uniswap V1 and V2.

Uniswap is a web3 ecosystem for trading and automated liquidity provision

Based on the pool and your liquidity parameters, a unique NFT will be created representing your position in that particular pool. As the owner of this NFT, you can modify or redeem the position.

V3 positions have custom liquidity ranges, which means that each position is subject to a separate and customizable set of parameters that determine its value and reward. You can set a specific price range in which you provide liquidity. This range means that you receive a fee if the market price is within your chosen range.

For example, in a stablecoin/stablecoin pair, an LP can choose to allocate capital exclusively in the 0.99-1.01 range. As a result, traders get deeper liquidity around the middle price and LPs earn more trading fees on their capital.

This NFT is an example of generative art. Uniswap v3 NFTs are SVGs created on-chain and derived from liquidity position properties.

This NFT is deposited in your wallet when you add v3 liquidity.

Uniswap NFT. How to Buy

Since the liquidity position is an NFT of the ERC-721 standard, you can use any tools that support this standard including selling through marketplaces such as Opensea or Uniswap itself. Also you can selling on your own through the Envelop NFT explorer.

But keep in mind that this NFT represents your ownership of your liquidity position.

If you decide to sell for 1 ETH your NFT, which represents a liquid position worth 100 ETH, then the new owner of the NFT will own the LP tokens you provided and will be able to take your liquidity.

These NFTs can be traded and the fees earned for the position can be claimed by the holder at any time.

Uniswap NFT Price

In fact, the price of a position is determined by the price of a pair denominated in one currency. Such a price is easy to calculate, for example, in a ETH/USDT pair, calculate the price of Ether in the moment and add it to the USDT locked in the position. But difficulties may arise if your order will be open for a considerable time, then you will have to change the price of the order all the time. On the other hand, it is important to take into account the yield of the pool, so that when you sell the position, the deal remains profitable for you.

One solution is offered by lending protocols where you can lend crypto assets against your liquidity position. You can do this in protocols such as Parallel Finance or Revert.

What Can I See on Uniswap v3 NFT?

You can view your Uniswap v3 NFT in any NFT explorer, marketplace or in Uniswap itself. The NFT image shows the most important information about your liquidity position.

1. At the top of the NFT you will see the pair symbols.
2. Directly below that you will see the selected fee tier.
3. On the side, the token symbols and the pool’s address are moving around.
4. In the middle you can find the liquidity curve. Tokens on Uniswap are traded on a bonding curve, and the design indicates the steepness of this curve, which is influenced by where liquidity providers decide to set their ranges. The shape of the curve depends on the concentration of liquidity as well as the ratio at which the tokens were originally deposited.
5. The NFT color scheme is based on two underlying tokens, but the color distribution is unique for each token ID, so each is unique, but they are thematic for each pool.
6. Below the curve, you can find your NFT ID and the minimum and maximum price range set by the liquidity provider.
7. The small icon in the bottom right corner shows the LP position on the curve (price range position) where the liquidity provider is active in the pool.
8. Sometimes you may see a small sparkle above this small curve icon: Sparkle on NFT is a rare attribute and has a small probability of occurrence that decreases as the token ID increases (~10% at ID 100, ~3% at ID 100,000).

Uniswap v3 NFT Data

The liquidity position NFT (lpNFT) stores the following complete data:

• Nonce (used to track authorization nonces)
• Operator (usually address 0 unless you have authorized another person to manage the liquidity)
• Token0 address (address of the first token in the pool)
• Token1 address (address of the second token in the pool)
• Pool Fee Tier (the selected fee tier of your pool)
• Lower Tick (the lower price boundary of the position)
• Upper Tick (the upper price boundary of the position)
• Liquidity Value (the value of liquidity in the position)
• feeGrowthInside0LastX128 (used to track the fee on token0)
• feeGrowthInside1LastX128 (used to track commission on token1)
• tokensOwed0 (used as a temporary value only)
• tokensOwed1 (used as a temporary value only)

Are liquidity pool positions in Uniswap v4 NFTs

On February 1, 2025, Uniswap launched the v4. 

Uniswap v3 and Uniswap v4 represent liquidity using NFTs.

Everything that is said in this article on the liquidity position applies to both v3 and v4.