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Concentrated Liquidity AMM

What is Concentrated Liquidity?​

OctoSwap's Concentrated Liquidity AMM brings a new level of capital efficiency to both liquidity providers and traders. Unlike legacy AMMs, where liquidity is distributed across the entire price curve, concentrated AMMs let liquidity providers focus their funds within specific price ranges—right where most trading happens.

Concentrated liquidity works similarly to an order book, but with the ease and automation of DeFi. Each liquidity position is like setting a series of limit orders within your chosen price range. This allows LPs to "make markets" automatically, without the need for constant management or complex strategies.

Fee Tiers and Asset Optimization​

This model also introduces multiple fee tiers for different pools. Stable pairs and low-volatility assets—like stablecoins or liquid staking tokens (LSTs)—can benefit from lower fee tiers, supporting high-volume, low-cost trading. In contrast, more volatile pairs are matched with higher fee tiers, offering LPs greater compensation for increased risk and market movement.

Key Benefits​

Capital Efficiency: Provide liquidity where it matters most, not across the entire curve.

Order Book–like Flexibility: Choose your price range, just like placing limit orders, but in a fully automated way.

Custom Strategies: Select both price range and fee tier to match your goals.

Higher Yield Potential: Earn more fees with less capital when your range is active.

Lower Slippage: Tighter liquidity and appropriate fees mean better trade execution for everyone.

Optimized for All Assets: Low fees for stable assets, higher fees for volatile pairs—everyone benefits.

Advanced Market Making Made Simple​

Concentrated Liquidity AMMs empower everyone to participate in advanced market making with a user-friendly DeFi experience. Whether you want passive yield or hands-on management, OctoSwap's concentrated pools and dynamic fee tiers give you powerful new options.

Ready to get started? See our guide to providing liquidity in concentrated pools →