Price Moves in Ranges
Last updated
Last updated
Once you set a range, it is important to track the market and current prices to make sure that your liquidity is active. If you are unwilling to track the market and check your position regularly, you can add liquidity for a wide/full range
On TONCO DEX users can't edit the position settings (price range, the amount of tokens) after they have provided liquidity. All the parameters are set during the initial liquidity provision. If they wish to change the position, it is necessary to withdraw the liquidity from a particular pool and provide it once again for the new preferable parameters.
Once users provide liquidity, it can be in two stages—active or inactive corresponding to the current price.
When the range set by a Liquidity Provider intersects or matches the real price diapason where trades occur, their provided liquidity starts to bring profit. Once liquidity is active, users receive LP rewards and automatically participate in V3 Farms, which also brings profit.
You are providing liquidity in the TON/USDT pair. Let's say the TON price is 6 USDT. You have provided 1000 USDT and 166 TON (~$2000), then you have set a narrow price range for TON/USDT of -5% to +10%.
This means you will receive a fees when the price ranges from $5.7 to $6.6 USDT per 1 TON.
Assuming an initial APR of 100% for this narrow range, you will earn rewards as long as the price stays within this range.
If the price fluctuates within the range of $5.7 to $6.6 USDT, as an LP provider for 1 month, you will approximately receive:
📍 If the price moves outside the range, APR will not be earned.
📍 If the price exceeds the upper limit (6.6 USDT per TON), the position will only consist of USDT. If the price falls to the lower limit (5.7 USDT per TON), the position will fully transition to the volatile asset — TON.
The narrower the range you set, the higher your APR becomes, as its liquidity is used much more effectively. But the greater the risk that the price will move out of the range.
Crypto prices can move outside the range set by the Liquidity Provider because of market volatility. In such a case, the liquidity stops earning LP rewards from fees and becomes inactive.
You can simply leave your liquidity as is, even if it moves out of range.
Pros:
✅ No transaction fees (gas costs) from rebalancing.
✅ If the price returns to your range, you'll start earning fees again automatically.
Cons:
❌ No fees earned while out of range.
❌ Your position shifts to mostly USDT, which may not be ideal if you expect TON to keep rising.
Reposition liquidity to a higher range ($4.2–$4.9 for example) by withdrawing and redepositing. This may require swapping or using single-sided liquidity while awaiting a retracement.
Pros:
✅ Start earning fees again if the price stays in the new range.
✅ Maintain exposure to TON if you expect the uptrend to continue.
Cons:
❌ Incurs transaction costs.
❌ If the price quickly drops back, you might miss out on fees and pay extra to readjust.
You can withdraw your liquidity entirely and either hold your assets or reinvest them elsewhere.
Pros:
✅ Avoid potential impermanent loss if you expect TON to keep rising.
✅ Flexibility to explore other investment opportunities.
Cons:
❌ No longer earning trading fees.
❌ May incur transaction fees and potential tax implications.
If you have extra capital, you can add liquidity at higher price ranges without altering your existing position.
Pros:
✅ Earn fees across a wider range if volatility increases.
✅ Diversify your liquidity positions within the pool.
Cons:
❌ Greater exposure to price swings if the market moves against you.
❌ More capital locked in the liquidity pool.
For this reason, users should track the state of their liquidity regularly to notice inactive states on time
⚠️ Get instant alerts when your position goes out of range and stops earning fees. Simply attach your wallet, select the positions to track & receive 24/7 notifications.
Try it using TONCO Notifications Bot: t.me/tonco_notifications_bot
