Carbon DeFi Strategy Explainers — Concentrated Liquidity
Most concentrated liquidity positions require ongoing adjustments, external tools, or complex pool mechanics. On Carbon DeFi, it’s simple: define your range, set your profit margin, fund your position — and let it run — with zero external dependencies.
What Is a Concentrated Liquidity Strategy?
Concentrated liquidity means you choose a price range where you’re willing to buy or sell — and create a strategy that only becomes active within that range. Unlike AMMs or pool-based systems, you’re not locked into fixed curves or split liquidity across prices.
On Carbon DeFi, you define both the range and the spread — meaning you’re in charge of the profit margin, acting more like a market maker than a passive LP.
All earned fees are automatically added back into your position, compounding your exposure over time — no need to claim or redeploy.
Why Use Concentrated Liquidity on Carbon DeFi
Auto-compounding — Fees earned are automatically re-added to your strategy, making Carbon DeFi more time, gas, and capital efficient
Token flexibility — Combine any two standard ERC20 tokens
Set your own fee tier — Determine your personal profit margin
Custom price range — Only target the prices you care about
Powered by the Arb Fast Lane
Carbon DeFi’s built-in solver system helps ensure strategies are traded against with precision and speed — optimized for both order to order fulfillment and accessing chain-wide liquidity.
When to Use Concentrated Liquidity Strategies
When managing or providing trading liquidity for a token pair or project
To support a peg or narrow price band
To act like a market maker with a set profit margin
How to Create a Concentrated Liquidity Strategy on Carbon DeFi
1. Choose your token pair
2. Set your custom price range and fee tier
3. Fund your strategy and confirm
💥 Bonus Features
Test Before You Go Live — Use the simulator to backtest your strategy and see how it would’ve performed
Track Everything Onchain — The Activity Tracker keeps your position visible and manageable in real time
👉 Create a custom liquidity position now on Carbon DeFi
This post is part of the Carbon DeFi Strategy Explainers:
How to Place Limit Orders on Carbon DeFi
How to Scale In/Out Using Carbon DeFi Range Orders
