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Understanding and Managing Liquidity Positions

Understanding and Managing Liquidity Positions

With Forge, all price ranges do not have an even liquidity distribution. Instead, liquidity providers can set custom price ranges for their liquidity, called "concentrated liquidity." This feature allows liquidity providers to serve a range of prices they believe are most relevant, improving capital efficiency.

You can go to the “Add Liquidity" section of the Forge interface to manage your liquidity positions. Here, you can see your current liquidity positions, including the tokens you've deposited, the price range, your pool share, and the fees you've earned.

Remember, when you provide liquidity, you are taking on risk. If the price of the tokens in your pool changes significantly, you may experience impermanent loss, where you would have been better off simply holding your tokens rather than providing liquidity. Understanding and regularly monitoring your positions and the overall market conditions is essential.