DeFi · 54 / 86
Concentrated liquidity
Concentrated liquidity puts your deposit in a narrow price range. You earn more in fees while the price stays there. When it leaves, you may earn nothing and hold only the worse asset.
The range
You choose a band. Inside the band, traders use your money. Outside it, your position sits in one coin and waits.
The work
Someone has to move the range, or it dies. That work costs gas and attention. A vault that does it for you takes a fee and adds another contract.
A huge percentage on a narrow range is not a savings account. It is a bet that the price stays put.
Check yourself
Does a higher fee percentage mean a safer deposit?
No. A narrow range can stop earning and leave you with one asset.
After this you can say what you will hold if the price leaves your range.
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