> For the complete documentation index, see [llms.txt](https://docs.yuzu.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.yuzu.finance/products/clmm/price-ranges.md). # Price Ranges ## **How Do Liquidity Price Ranges Work?** In concentrated liquidity market maker (CLMM) pools, users can define specific price ranges within which they provide liquidity. Liquidity providers (LPs) earn fees based on their share of liquidity at the current market price, creating a strong incentive to actively manage positions to ensure the price remains within their selected range. If the market price moves outside an LP's chosen range, their position becomes inactive, ceasing to earn fees. Additionally, LPs may face increased impermanent loss. Similar to standard AMM pools, when the price of a base token rises, traders exchange the quote token for the base token, leaving the pool—and the LP—with more of the quote token and less of the base token. In CLMMs, this process is more concentrated within the selected price range, leading to accelerated effects: * If the price drops below the minimum of the selected range, the LP's position will consist entirely of the base token. * If the price exceeds the maximum of the range, the LP's position will fully convert to the quote token. This dynamic allows LPs to have greater control over their liquidity and the potential for higher returns but requires careful monitoring to minimize the risk of being out of range and missing fee opportunities. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.yuzu.finance/products/clmm/price-ranges.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.