# Basic Price Range Presets {% hint style="info" %} **Note for DEX Teams:** This section introduces **price range presets** use in concentrated liquidity provisioning. Use this section to help your users understand: * How to set custom price ranges * The difference between full-range vs. narrow-range provisioning The examples below use **Algebra’s standard testnet UI and onboarding materials**, designed to illustrate key mechanics. These materials are **to be recreated and adapted** to match the final UI and UX of your DEX product. {% endhint %} When providing liquidity, users allocate their assets to a specific **price range** — defined by the upper and lower bounds where their liquidity will remain active.\ This approach is central to concentrated liquidity AMMs and enables capital efficiency. ## Available Presets To simplify this experience, DEXs built on Algebra can offer **preset ranges** designed for different user needs and risk appetites.\ These include: **Narrow**, **Common**, **Wide**, and **Full Range** options. * **Narrow Range**\ Example: –5% to +10% of current price > Designed for advanced LPs aiming to maximize fee generation through high concentration. Requires active management. * **Common Range**\ Example: –10% to +20% > Balanced option for moderate fee income and risk. Suitable for users with some DeFi experience. * **Wide Range**\ Example: –20% to +40% > Offers reduced exposure to impermanent loss and less frequent rebalancing. Good for more volatile pairs or passive LPs. * **Full Range**\ Covers the entire price spectrum > Emulates V2-style passive LPing. Simplest for new users but less capital-efficient.
## Narrow vs Wide Ranges
#### **Narrow Ranges** * **High Fee Generation**: Generate more fees due to concentrated liquidity. * **Constant Monitoring**: Require frequent rebalancing to stay within the active range. * **High Impermanent Loss**: Heavily exposed to rapid price movements and IL. #### Wide Ranges * **Lower Fee Generation**: Generate fewer fees as liquidity is spread out. * **Less Frequent Rebalancing**: Require less manual intervention. * **Reduced Impermanent Loss**: Less affected by price movements. ## Choosing the Right Range #### For Volatile Pairs Pairs like ETH / USDT or ARB / USDT generally experience frequent price fluctuations.\ In these cases: * **Wide ranges** are often ideal for low to mid-volume pairs, reducing rebalancing needs and impermanent loss. * **Narrow ranges** may be profitable only on high-volume pairs, where trading fees are sufficient to outweigh risks and maintenance. > 💡 *Tip for users*: Rebalancing a narrow position frequently incurs gas fees, slippage, and opportunity costs. Consider passive ranges unless confident in active management. #### For Pegged Pairs Pegged or stable pairs (e.g., USDT / USDC, stETH / ETH) are generally low-risk in terms of impermanent loss. * **Very narrow ranges** (e.g., ±0.1%) are viable due to tight price correlation. * In the event of a minor depeg, LPs can: * Close the position * Swap to rebalance * Reopen at the new price center This strategy is only profitable if collected fees exceed the cost of repositioning. In low-volume environments, a **slightly wider preset** might be more practical to reduce management friction. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.algebra.finance/algebra-integral-documentation/price-ranges-and-liquidity-strategies/basic-price-range-presets.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.