Liquidity Overview
Providing liquidity is how you earn from trading activity on SNAP. You can choose between classic pools for simplicity or concentrated liquidity for higher efficiency.
Two models
Classic pools
Cover the full price range.
Simple to use with no rebalancing required.
Lower capital efficiency compared to concentrated liquidity.
Concentrated liquidity
Place funds inside a chosen price band.
Narrower bands earn higher fees when in range.
Requires monitoring and repositioning if the market moves.
Choosing a range
Full range: Lowest effort, always active, but least efficient.
Wide range: Balanced approach—covers movement while still efficient.
Narrow range: Highest potential returns but requires frequent adjustments.
Dynamic fees
Some pools adjust fees based on volatility:
Higher fees in volatile markets to offset risk.
Lower fees in stable conditions to encourage volume.
Impermanent loss
When token prices diverge, your liquidity position may be worth less than simply holding. Smart band selection and rebalancing help reduce exposure.
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