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Binance Academy
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What are Concentrated Liquidity Market Makers (CLMM)? ?
Key takeaways
CLMMs allow liquidity providers to define precise price ranges for their assets, instead of distributing them across all possible prices.
This model can improve efficiency by concentrating funds where trades actually occur, helping providers potentially earn more fees with the same capital.
Unlike traditional models, CLMMs require users to monitor the market more frequently, as they stop earning fees when the price moves outside their custom range.
CLMMs allow liquidity providers to define precise price ranges for their assets, instead of distributing them across all possible prices.
This model can improve efficiency by concentrating funds where trades actually occur, helping providers potentially earn more fees with the same capital.
Unlike traditional models, CLMMs require users to monitor the market more frequently, as they stop earning fees when the price moves outside their custom range.
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