Concentrated Liquidity

Concentrated liquidity lets liquidity providers (LPs) choose a price range for their capital instead of spreading it across the entire market. This makes liquidity more efficient and ensures funds are active where trading happens most.

Why it matters

• Higher efficiency: Liquidity in active price bands generates more fees with less capital.

• Better trading: Concentrated liquidity reduces slippage and creates tighter spreads.

• Attractive to aggregators: Routing volume through efficient pools increases usage and rewards.

How it works in SNAP

• Manual positions – LPs set their own ranges. They earn trading fees when swaps occur inside those ranges, but need to rebalance if the market moves.

• Managed strategies – Automated vaults (ALMs) place and adjust ranges for you. These focus on capturing emissions and rewards rather than trading fees.

Benefits and trade-offs

• Pros: More capital-efficient, higher potential returns, better execution for traders.

• Cons: Requires monitoring if done manually, risk of being out-of-range, exposure to impermanent loss.

SNAP gives you the flexibility to choose: manage your own ranges for control and fee income, or rely on managed strategies for automation and protocol incentives.