V3 vs. V4: Key Differences

V3 DEXes (like Uniswap V3 or Algebra V3) introduced concentrated liquidity, enabling LPs to earn more by deploying capital within custom price ranges. However, core mechanics — like fee models, incentive logic, and routing — were still hardcoded into monolithic contracts. This made upgrades and experimentation difficult and expensive, requiring new deployments, liquidity migrations and costly audits of entire new codebase.

V4 DEXes, while keeping CLAMM at its core, use a modular plugin system. Features like dynamic fees, farming logic, or token-specific handling can be added, removed, or updated without touching the base contracts or migrating liquidity. This unlocks unprecedented flexibility for builders and protocols.

Why Modularity Matters for DEX Teams

With a modular architecture like Algebra V4, partnering DEX gains:

• Plug-and-play upgrades — Introduce custom features per pool without redeploying your entire DEX

• Custom strategies — Offer different mechanics for different token pairs or ecosystems

• Faster innovation cycles — Test, iterate, and deploy new ideas without disruption

• No forced migrations — Liquidity stays in place, users stay onboard

Algebra: The First Modular CLAMM Engine

Algebra pioneered modularity before it was mainstream — launching the first CLAMM engine with full plugin support in production. Over 20+ DEXes across chains like Arbitrum, Base, BNB Chain, Polygon, and more now run on Algebra, each fine-tuned with pool-specific logic and features.

From dynamic fees to referral systems and native farming, Algebra gives DEXes all the flexibility of V4 architecture.