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Algebra vs Uniswap: Key Differences

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Core Contracts

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Factory

contract AlgebraFactory {
    function createPool(address tokenA, address tokenB) external returns (address pool);
    // No fee tier specification
}

• Algebra doesn’t use fixed fee tiers; fees are dynamic.
• Algebra’s factory doesn’t require a fee parameter when creating a pool.

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Pool

contract AlgebraPool {
    function swap(...) external returns (...);
    // Includes dynamic fee calculation
}

• Algebra pools implement dynamic fees.
• Algebra pools have a different liquidity distribution algorithm.

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Router

contract AlgebraRouter {
    function exactInputSingle(ExactInputSingleParams memory params) external payable returns (uint256 amountOut);
    // No fee parameter in swap functions
}

• Algebra’s router doesn’t require fee specifications for swaps.
• Swap function signatures differ slightly.

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Quoter

contract AlgebraQuoter {
    function quoteExactInputSingle(address tokenIn, address tokenOut, uint256 amountIn, uint160 limitSqrtPrice) public returns (uint256 amountOut);
    // No fee parameter
}

• Algebra’s quoter doesn’t require fee input.
• Slight differences in function parameters.

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Key Functional Differences

1. Dynamic Fees
   • Algebra: Implements dynamic fees based on market conditions.
   • Uniswap: Uses fixed fee tiers (0.05%, 0.3%, 1%).
2. Liquidity Distribution
   • Algebra: Uses a different algorithm for distributing liquidity.
   • Uniswap: Uses the concept of tick-based liquidity concentration.
3. Pool Initialization
   • Algebra: Doesn’t require an initial price; uses an oracle-like system.
   • Uniswap: Requires setting an initial price when creating a pool.
4. Price Range
   • Algebra: Supports a wider price range.
   • Uniswap: Has a more limited price range.

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Integration Considerations

1. Remove fee tier logic from pool creation and swaps.
2. Implement dynamic fee handling in frontend and backend systems.
3. Adjust liquidity provision interfaces to match Algebra’s distribution model.
4. Update oracle interactions to align with Algebra’s price feed mechanism.

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Performance Implications

• Algebra may offer gas optimizations due to its simplified pool structure.
• Dynamic fees could lead to more efficient market-responsive liquidity.

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Upgrading from Uniswap

1. Replace core contracts (Factory, Pool, Router, Quoter).
2. Update function calls to remove fee parameters.
3. Modify liquidity provision logic to adapt to Algebra’s model.
4. Adjust frontend to handle dynamic fees and different price range mechanics.

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Testing and Verification

• Pool creation without fee tiers
• Swaps with dynamic fee calculation
• Liquidity provision across a wider price range
• Oracle price feed integration

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Conclusion