Writing a Uniswap v3 Liquidity Provision Bot

Uniswap v3 liquidity bots are inventory management systems, not passive yield machines. Performance depends on range placement, rebalance frequency, gas cost discipline, and adverse selection control.

Core Bot Components

• Volatility-aware range model (narrow in low vol, wider in high vol).
• On-chain position state tracker with fee accrual snapshots.
• Gas-aware rebalance trigger and cooldown timer.
• Inventory skew monitor to avoid directional drift.

def should_rebalance(price, lower, upper, gas_cost_usd, min_fee_capture_usd):
    out_of_range = price < lower or price > upper
    fee_edge = min_fee_capture_usd > gas_cost_usd * 1.5
    return out_of_range and fee_edge

Risk Rules You Need

• Cap max TVL per pool and per chain.
• Disable rebalance during abnormal gas spikes.
• Pause on oracle deviation or stale block data.
• Set emergency withdrawal criteria for protocol incidents.

For most teams, the edge comes from disciplined operations and low-friction execution, not constant range micromanagement.