SparkDEX V3.1
SparkDEX V3.1 is a decentralised exchange on Flare where yield comes from providing pooled liquidity to traders. Every LP position holds two assets and rebalances against the market, so a price move in either asset leaves the provider with less than holding would have. That impermanent loss is the mechanism we reject across the whole AMM category: the client sees a loss they were never told to expect, in a position we recommended. SparkDEX held $9.1M across 18 pools at the August 14, 2026 survey. The file reopens only if it ships a product without that exposure.
- Ships a product line without impermanent-loss exposure that merits its own review
Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.
The research file
Applicability to the surveyed record
SparkDEX documents V3 as a UniV3-style concentrated-liquidity AMM. LPs choose a price range, earn fees while active and can be converted entirely into one token when price leaves the range. Automated or single-sided deposit wrappers still deploy into those LP positions, so they do not remove the shared AMM-LP mechanism.
Current observation and perimeter
The DefiLlama API read on 2026-08-15 classified SparkDEX V3.1 as a DEX on Flare and reported approximately $8.41M TVL. SparkDEX now documents migration from V3.1 to V4, but the separately surveyed V3.1 residual remains live and economically within the AMM-LP class.
Control and exit applicability
Token pair, range, fee tier and price movement determine the LP inventory and fee income. An out-of-range position becomes one-sided and stops earning active-range fees; automated liquidity managers choose or rebalance ranges for wrapped positions, transferring rather than eliminating strategy authority and inventory-conversion risk.
Why the class rule decides
The shared v1 AMM-LP dossier controls because V3.1 returns require concentrated two-token inventory and adverse conversion when price exits the selected range. Reopen only for an economically separate SparkDEX product without AMM or perpetual-LP exposure, then review its mechanism, managers and controls, Flare and asset dependencies, audits and incidents, executable liquidity and stressed exit, and named alternatives.
Class rule
The amm lp class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.
Sources
The claims above trace to these. Where a number could not be independently verified, the thesis says so.
- SparkDEX — V3 DEX mechanics · primary · accessed 2026-08-15
Supports: V3 AMM, concentrated ranges, one-sided out-of-range inventory, LP NFT, fee tiers - SparkDEX — single-sided LP and managers · primary · accessed 2026-08-15
Supports: LP vault wrapper, ICHI manager, Steer manager, automated strategy, withdrawal - SparkDEX — V3.1 to V4 migration · primary · accessed 2026-08-15
Supports: V3.1 product identity, V4 migration, current lifecycle - DefiLlama — SparkDEX V3.1 survey record · secondary · accessed 2026-08-15
Supports: current TVL, Flare, DEX category, survey perimeter
Inherited controls
The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.
| Chain | Verdict | Control | Control constraint |
|---|---|---|---|
| Flare | Approved with limits | Governed, no freeze | consensus entry is permissionless, but the Foundation monopolizes governance proposals and manually executes some approved changes. |