Non-Fungible Liquidity Positions

Understanding Non-Fungible Liquidity Positions

Because each liquidity position can have a custom price range and fee tier, Pangolin V3 issues non-fungible token (NFT) representations for LP positions instead of uniform ERC-20 pool tokens. When you add liquidity, you receive an NFT (sometimes called an LP token NFT) that represents your position’s specifics (pair, range, fee tier, and liquidity amount). Each position is unique, but it is still transferable – you can send your liquidity NFT to another address, trade it, or use it in other protocols if supported. Pangolin may offer tools or “periphery” contracts to make common positions fungible (for instance, combining identical range positions), but generally your liquidity is an individualized NFT. The use of NFTs does NOT affect your user experience on the Pangolin app – the interface will show your positions and allow you to manage or withdraw them normally – but it’s an important detail for integration and advanced use cases.