What are Three-Wire Loops?

3-wire loop requires 3 wires for power and output connections.

Three-wire loops offer some of the flexibilities of the four-wire configuration and the savings and simplicity of one less wire to install.

They do suffer from certain inflexibility in that the same return line is shared by both power and signal grounds. If substantial power or long lengths are involved, the voltage drop (I x RRETURN) in the shared ground return can substantially interfere with the accuracy of voltage-mode signal transmission.

In current-mode and frequency-mode signal transmission, this constraint can be avoided.