What is Uniswap V3?

Could you please elaborate on what Uniswap V3 is? I've heard it's a significant upgrade from its predecessors, but I'm not entirely clear on the specifics. How does it differ from Uniswap V2, and what new features or improvements does it bring to the decentralized exchange space? I'm particularly interested in understanding its capital efficiency enhancements and how they impact traders and liquidity providers.