Concentrated Liquidity
An AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency.
An AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency.
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Sep 2026 · نقاط الحداثة: 50%
What is Concentrated Liquidity?
An AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency.
- Category
- concept
- Type
- Authority Node
- المصادر
- 1
Instead of providing liquidity across the full price curve, a provider selects a range where they expect prices to trade. Capital in that range is used efficiently, earning higher fees. If prices move out of range, the position stops earnin
Concentrated liquidity dramatically improves capital efficiency, deepening liquidity at active price levels. It also shifts risk to providers, who must actively manage ranges. The model reshaped AMM design across DeFi.
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Overview
Concentrated liquidity is an AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency. Uniswap v3 popularized the model. Providers earn more fees per unit of capital but take on more active-management risk.
How It Works
Instead of providing liquidity across the full price curve, a provider selects a range where they expect prices to trade. Capital in that range is used efficiently, earning higher fees. If prices move out of range, the position stops earning until adjusted.
Why It Matters
Concentrated liquidity dramatically improves capital efficiency, deepening liquidity at active price levels. It also shifts risk to providers, who must actively manage ranges. The model reshaped AMM design across DeFi.
Related Concepts
Concentrated Liquidity builds on AMMs and Liquidity Pools, and relates to Impermanent Loss and Slippage. It is central to modern DEX design.
Frequently Asked Questions
What is Concentrated Liquidity?
An AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency.
How does Concentrated Liquidity work?
Concentrated liquidity is an AMM design that lets providers concentrate capital within specific price ranges for higher capital efficiency. Uniswap v3 popularized the model. Providers earn more fees per unit of capital but take on more active-management risk. Instead of providing liquidity across t
Why does Concentrated Liquidity matter in Web3?
Instead of providing liquidity across the full price curve, a provider selects a range where they expect prices to trade. Capital in that range is used efficiently, earning higher fees. If prices move out of range, the position stops earning until adjusted. Concentrated liquidity dramatically impro