An AMM design (introduced by Uniswap V3) where liquidity providers can allocate capital to specific price ranges instead of across the entire curve. This increases capital efficiency but requires active management and introduces tick-based accounting.
AMM
Concentrated Liquidity
Related terms in AMM
Automated Market Maker (AMM)
A smart contract that holds token reserves and enables trading without an order book. Prices are determined al...
Constant Product Formula
The pricing invariant x * y = k, where x and y are token reserves and k is a constant. When one token is bough...
Liquidity Pool
A smart contract holding paired token reserves that enables trading. Liquidity providers deposit equal value o...
Liquidity Provider (LP)
A user who deposits tokens into a liquidity pool to facilitate trading, earning a share of trading fees in ret...