> For the complete documentation index, see [llms.txt](https://docs.capybara.exchange/english/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.capybara.exchange/english/getting-started/earn/create-pool.md).

# Create Pool

### Permissionless Pools

**Definition**\
Permissionless pools are user-deployed liquidity pools that do not require any centralized approval. Liquidity providers (LPs) supply a trading pair (e.g., ETH/USDC), and the pool automatically facilitates swaps between those tokens.

**Key Features**

* **Fully decentralized** **and self-managed**: Anyone can create a pool without gatekeepers.
* **Requires technical knowledge** to deploy and configure properly.
* **Maximum flexibility** for advanced users who want custom configurations.

***

#### V2 vs. V3 at a Glance

|                            | **v2**                                          | **v3**                                                                               |
| -------------------------- | ----------------------------------------------- | ------------------------------------------------------------------------------------ |
| **Liquidity Distribution** | Spread across the entire price range (0 to ∞)   | Concentrated liquidity within user-defined price ranges                              |
| **LP Token Type**          | **Fungible** (ERC-20)                           | **Non-fungible** (NFT), each position has custom parameters                          |
| **Capital Efficiency**     | Lower; a lot of liquidity sits unused           | Potentially much higher; LPs can earn more with less capital at risk                 |
| **Complexity**             | Relatively simple, easy to set up               | More advanced; LPs must actively manage or specify price ranges to keep earning fees |
| **Fee Tiers**              | Single default (0.30%)                          | Multiple tiers (0.05%, 0.30%, 1.00%), letting LPs balance risk vs. reward            |
| **Best For**               | Users wanting simplicity or wide price coverage | Users who want to optimize for greater returns, can handle more active management    |

***

#### How It Works in V2

* **Single Price Curve**: Liquidity is distributed across all prices between 0 and ∞.
* **Fungible LP Tokens**: When you deposit assets, you receive ERC-20 tokens representing your share in the pool.
* **Simple Setup**: Less fine-tuning is required. Even so, you’ll need to deposit proportional amounts of both tokens.

#### How It Works in V3

* **Concentrated Liquidity**: Choose the exact price range to provide most of your liquidity, improving fee potential.
* **Non-Fungible Positions**: Each position is unique and represented as an NFT instead of a fungible LP token.
* **Fee Tiers**: You pick a fee tier that suits your pair’s volatility (e.g., 0.05% for correlated assets, 0.30% for popular pairs like ETH/USDC, 1.00% for exotic assets).
* **Active Management**: If the price moves outside your specified range, your liquidity is no longer active until you rebalance.

***

#### Which Version Should You Use?

* **Choose v2 if** you want a straightforward, fully permissionless pool where you don’t have to manage price ranges.
* **Choose v3 if** you want greater control over how your capital is allocated, potentially higher returns, and you’re comfortable actively managing or using tools that automate rebalancing.