Leverage Concentrated Liquidity

Concentrated Liquidity

Concentrated liquidity allows liquidity providers to allocate capital within a specific price range instead of across the entire price curve. This approach increases capital efficiency and enhances potential returns, especially when paired with leverage.

How it works

When you open a leveraged LP position on Moar, you select a price range where your liquidity will be active. Your deposit is routed through a credit account and deployed into a concentrated liquidity market maker such as Hyperion.

As long as the market price remains within your selected range, you earn swap fees & rewards. If the price moves outside your range, your liquidity becomes inactive.

In-Range vs Out-of-Range

In-Range: Your liquidity is active and accruing swap fees and incentives. This is the ideal state for earning yield.

Out-of-Range: Your position is not earning fees. If leverage is used, you're still paying borrow fees. This can eat into your collateral and increase risk of liquidation.

Strategy Considerations

A narrow price range results in higher fee yields but also increases the chance of going out-of-range. This setup is better suited to short-term or actively managed positions.

A wider price range lowers fee yield but improves the chances of staying in range longer. This can be a good option for passive LPs.

If you want to avoid managing the position manually, you can use a vault strategy that automates these decisions for you.