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Providing liquidity exposes you to the assets and rules of the pool you choose. Earning fees does not guarantee a positive return.

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Your exposure changes

Trades change your position’s token mix. You can end up holding more of a token that falls and less of one that rises. Outside the range, principal becomes one-sided; see the range example.

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Impermanent loss

Impermanent loss is the shortfall between your position’s value and simply holding the original tokens, before fees and costs. If holding would be worth $1,100 but your position is worth $1,030, the loss is $70. Fees may or may not offset it. Prices may never return, so the loss can become permanent. See Uniswap’s explanation of impermanent loss.

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Newly launched tokens

Verify the contract address, not just the symbol. A new token can have thin liquidity, concentrated ownership, transfer restrictions, or a volatile price. A short burst of volume or an annualized fee figure is not evidence of sustained earnings.

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Pool and hook rules

A V4 hook can affect liquidity actions and fees. Check the hook address and its published rules before using the pool. Availability in Range is not an audit or endorsement of any token, pool, or hook. Smart contract failures can affect deposited assets. See Uniswap’s LP risk overview.

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Wallet and transactions

Range never holds your funds. Review what your wallet asks you to sign, and remember a failed transaction can still cost gas. See Security and earning fees.