Range Management

Range Management is the tactical process of defining and updating the price intervals where liquidity is active. It is the core operational task in concentrated liquidity protocols, requiring a balance between capturing high fee volume and avoiding periods of inactivity.

If the market price moves outside the defined range, the liquidity becomes inactive and ceases to earn fees, necessitating a prompt re-entry or range expansion. Successful range management requires a blend of technical analysis, market sentiment evaluation, and an understanding of the underlying asset's volatility.

It is a dynamic process that directly influences the capital efficiency and overall performance of a liquidity provider's portfolio. It requires a disciplined approach to risk and reward.