Provide liquidity within specific price ranges for enhanced capital efficiency.
Liquidity provisionIntermediate
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Typical APY range10% - 100%
What is Concentrated Liquidity?
Concentrated liquidity, pioneered by Uniswap V3, allows LPs to focus their capital within specific price ranges rather than across the entire price spectrum. This dramatically increases capital efficiency. Earning the same fees with a fraction of the capital.
How It Works
Choose a trading pair (e.g., ETH/USDC)
Define your price range (e.g., $1,800-$2,200)
Deposit liquidity within that range
Earn fees only when price is in your range
Rebalance when price moves out of range
Strategy Types
Tight Range: Higher fees but requires frequent rebalancing
Wide Range: Lower fees but more passive
Asymmetric: Favor one direction based on market view
Risk Management
Impermanent Loss: Amplified in concentrated positions
Range Management: Must rebalance when price exits
Gas Costs: Rebalancing costs reduce returns
Track concentrated LP positions with Fensory.
How to Get Started
1Analyze price history and volatility
2Define appropriate price range
3Deposit liquidity in chosen range
4Monitor position and price movement
5Rebalance when price exits range
6Collect and compound fees
Pros
✓Higher capital efficiency
✓Potentially higher APY than full-range
✓Customizable exposure
Cons
✗Requires active management
✗Higher IL if price moves significantly
✗Gas costs for rebalancing
Put this strategy to work. See which protocols offer the best rates.
Track live yields, compare protocols, and build your DeFi portfolio with Fensory.