A liquidity position looks simple from far away: deposit two assets, earn fees, watch the number move. Up close, it is closer to running a tiny market-making desk.
Your capital is inventory. The pool uses it to serve trades. Fees are the payment for taking that job, but the inventory can change shape while it works.
Range is the job description
In concentrated liquidity, your range decides where your capital is active. A tight range can earn more when price stays nearby. It can also fall out of range faster and leave the position doing less work than expected.
Fees do not cancel every risk
Fees can soften impermanent loss. They do not erase it by default. A position can earn plenty of fees and still end lower if the asset mix moves against it hard enough.
The useful question is not "what is the APY?" It is "what has to stay true for this APY to matter?"
What Degxifi watches
- Whether the position is still in range.
- Whether fees are overcoming price movement.
- Whether rebalancing helps or just adds churn.
- Whether the user can exit cleanly when conditions change.