Crypto Concentrated Liquidity Calculator

About the Crypto Concentrated Liquidity Calculator

Concentrated liquidity revolutionized DeFi by allowing liquidity providers to focus their capital within a specific price range. Instead of spreading liquidity across the entire price spectrum (0 to infinity), you can concentrate it in a narrow band around the current price, dramatically increasing capital efficiency.

This Concentrated Liquidity Calculator shows how much more efficient a narrow range is compared to a full-range position. Enter your price range bounds and the current price, and the tool computes the capital efficiency multiplier — how many times more fees you earn per dollar deployed.

A position concentrated between $1,900 and $2,100 when the price is $2,000 might be 20x more capital efficient than a full-range position. This means $1,000 in a narrow range earns the same fees as $20,000 in a full range.

Use the result to map token-release or fee scenarios and revisit the model when market conditions, unlock terms, or portfolio assumptions change.

When This Page Helps

Concentrated liquidity lets you earn more fees with less capital, but it requires active management. This calculator quantifies the efficiency gains so you can right-size your range and capital deployment.

How to Use the Inputs

1. Enter the current price of the token pair.
2. Set the lower bound of your price range.
3. Set the upper bound of your price range.
4. View the capital efficiency multiplier.
5. Compare against a full-range position.

Example Calculation

Tips & Best Practices

• Narrower ranges = higher efficiency but more frequent rebalancing.
• If the price moves outside your range, you stop earning fees entirely.
• Balance efficiency against the risk of going out of range.
• Wider ranges require less management but earn proportionally less.
• Use historical price volatility to set appropriate range widths.
• Consider automating range management with tools like Arrakis or Gamma.

Capital Efficiency in Practice

A $10,000 full-range Uniswap v2 position might earn $2/day in fees. The same $10,000 concentrated in a ±5% range could earn $50/day — a 25x improvement. But if the price moves 6%, you stop earning entirely.

Managing Concentrated Positions

Active management is the cost of high efficiency. You need to monitor prices, rebalance when out of range, and adjust widths based on volatility. Automated managers (Arrakis, Gamma, Bunni) handle this for a fee, typically 10-20% of earned fees.

The Efficiency-Risk Tradeoff

There's an optimal range width for every pair and market condition. Too narrow and you're always rebalancing with high gas costs. Too wide and you lose the efficiency advantage. Backtesting historical price data helps find the sweet spot.

Frequently Asked Questions

• What happens when price moves outside my range?

  Your position becomes 100% one token and stops earning fees. You hold only the less valuable token. You can wait for the price to return, or withdraw and reposition at the current price.

• How narrow should my range be?

  It depends on the pair's volatility and your management frequency. Stablecoin pairs can use very narrow ranges (0.1%). Volatile pairs need wider ranges (10-50%) unless you're actively managing.

• Is concentrated liquidity riskier?

  It amplifies both returns and risks. You earn more fees in range but suffer more impermanent loss when the price moves. Going out of range means zero fee income. Active management is essential.

• Can I set an asymmetric range?

  Yes. If you're bullish on a token, you might set a range like $1,800-$3,000 instead of a symmetric range. This is a directional liquidity position — part LP, part limit order.

• What is a range order?

  A range order is a concentrated liquidity position set entirely above or below the current price. It acts like a limit order that earns fees while waiting to fill. Once filled, you can withdraw the converted tokens.

• How does concentrated liquidity affect impermanent loss?

  Concentrated positions amplify IL proportionally to the capital efficiency multiplier. A 10x efficient position has roughly 10x the IL per dollar deployed. The higher fees must compensate for this increased IL.