Step 5 - Define the Price Range
DataDex introduces Concentrated Liquidity, allowing you to specify a price range in which your liquidity will be active.
Lower Bound: The minimum price at which your liquidity will be active.
Upper Bound: The maximum price at which your liquidity will be active.
Key Considerations for Choosing a Price Range:
Wide Range:
Covers more market activity.
Generates fewer fees but reduces the risk of your position becoming inactive.
Suitable for less experienced LPs.
Narrow Range:
Higher capital efficiency and potential for greater fees.
Increased risk of impermanent loss if the price moves outside your range.
Requires active management.
Tip: DLP projects should opt for Full Range Liquidity initially and allow market makers to take the concentrated positions.
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