Price Moves in Ranges

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.

Active Liquidity

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.

Example:

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.

Inactive Liquidity

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 have two options:

1. Wait for the price to return: If you believe the price will come back to your range soon, you can hold your position.

2. Withdraw and rebalance it manually: Alternatively, you can withdraw your liquidity and open a new position with a new range, but this comes with transaction costs and potential slippage. You’ll need to weigh whether the LP fees earned will cover the costs.

For this reason, users should track the state of their liquidity regularly to notice inactive states on time.