> For the complete documentation index, see [llms.txt](https://brownfi.gitbook.io/brownfi-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://brownfi.gitbook.io/brownfi-docs/overview/evolution-v1-v2-and-v3.md).

# Evolution: V1, V2 and V3

BrownFi has evolved across three versions, each iteration addressing the shortcomings of the previous:

| Essentials        | BrownFi V1            | BrownFi V2                       | BrownFi V3                                  |
| ----------------- | --------------------- | -------------------------------- | ------------------------------------------- |
| Pool contract     | token0, token1        | same as V1                       | Distinct base vs. quote                     |
| Pricing mechanism | Oracle + price impact | Oracle + skewness + price impact | Asymmetric  extension of V2                 |
| Liquidity depth   | Symmetric             | Symmetric                        | Asymmetric                                  |
| Bid-ask spread    | No                    | No                               | Yes, asymmetric                             |
| Pool creation     | Permissioned          | Permissionless                   | Permissioned                                |
| LP share          | ERC20                 | ERC20                            | ERC20                                       |
| Add LP            | By token ratio        | 50/50 by dollar value            | Same as V2                                  |
| Remove LP         | By token ratio        | By token ratio                   | Same as V2                                  |
| Oracle gateway    | Single source         | Max of Pyth and AMM              | Weighted avg. of Pyth, AMM                  |
| Config params     | Kappa, fee (in core)  | Kappa, fee, skewness (in pool)   | Kappa, fee, skewness, spread (outside pool) |
| Admin roles       | Single role           | 3 separate roles                 | 5 separate roles                            |

**BrownFi V1**

V1 introduced the oracle-based AMM concept: all swap prices are anchored to an external oracle (Pyth) rather than the pool's internal price curve. Liquidity concentration is controlled by a single Kappa (K) parameter. V1 was symmetric — the same depth applied to both buy and sell directions.

**BrownFi V2**

V2 added a skewness mechanism: if the pool is imbalanced, the quoted swap price shifts to incentivize rebalancing toward a 50/50 dollar-value balance. V2 also moved to permissionless pool creation and separated admin roles into three distinct roles. An AMM price source was added alongside Pyth for better oracle resilience.

**BrownFi V3**

V3 is a comprehensive redesign that builds on V2's foundation with several key innovations: asymmetric liquidity depth (separate Kappa values for base and quote assets), a formal bid-ask spread mechanism, bounded skew incentives, and a dynamic spread that widens during oracle uncertainty or market volatility.

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