What is concentrated liquidity?

Concentrated liquidity lets a provider place capital within a chosen price range instead of spreading it thinly across every possible price from zero to infinity. In the older full-range model, most of your deposit sits idle at prices the market may never reach. By concentrating into the band where trading actually happens, the same capital backs far more volume and earns proportionally more fees.

The efficiency comes with active management. Your liquidity only earns while the price stays inside your range; if the market moves out of it, the position stops collecting fees and ends up entirely in one of the two tokens until price returns. Choosing a tight range maximizes fee yield but needs closer monitoring and occasional rebalancing, while a wider range is more passive but less efficient. Impermanent loss is also amplified within the active band.

Introduced by Uniswap V3 and carried into V4, concentrated positions are represented as NFTs rather than fungible LP tokens because each one has its own range. Sally supports adding and managing V3 and V4 concentrated-liquidity positions on Base and BNB Smart Chain, including setting ranges and rebalancing, so you can pursue the higher fee efficiency while keeping the position management in one place.