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Providing liquidity means supplying assets to a pool that traders use to swap tokens. As a liquidity provider, or LP, you earn a share of trading fees. Liquidity management is the work around that deposit: choosing a pool, setting your exposure, monitoring the position, and deciding when to claim fees or withdraw.

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A pool and a position are different

A pool is the market for a token pair. Several pools can exist for the same pair, with different fees or rules. A position is your contribution to one pool. With concentrated liquidity, you choose a price interval for it. You can hold several positions in the same pool or across tokens. See Uniswap’s introduction to concentrated liquidity.

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Follow one example

These docs use a fictional token, EXAMPLE, paired with a quote token. The quote token is the asset used to express EXAMPLE’s price. Examples are illustrations, not recommendations. After depositing, you follow two things: the assets in your position and the fees it earns. A growing fee balance does not mean your position is profitable overall.

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What you manage

Continue with how ranges work, then review risks and tradeoffs.