Concentrated Liquidity
Concentrated liquidity (Uniswap v3's breakthrough) lets liquidity providers aim their capital at a chosen price range instead of spreading it across all pr
Concentrated liquidity (Uniswap v3’s breakthrough) lets liquidity providers aim their capital at a chosen price range instead of spreading it across all prices — earning far more fees per dollar when the price stays in range, and nothing when it leaves.
Why it matters
It’s capital efficiency with a catch: out-of-range positions stop earning *and* end up 100% in the losing asset — impermanent loss with leverage-like concentration. Passive LPs routinely underperform simple holding; professionals actively rebalance ranges like a full-time job. Know which game you’re playing before depositing.