FAQ
1. Why do different LPs earn very different amounts with the same deposit?
Even if two LPs deposit the same token value, they can end up with very different numbers of LP Units, and therefore a very different share of active fees. Why?
Range width: A narrower range mints more LP Units per token.
Zone location: Only LP Units inside the active price zone count.
Competition: Your share depends on how many other LP Units are active in the same zone.
Practical Meaning 👉 Same token deposit ≠ same LP Units. Narrower ranges generate more LP Units, but only when price is inside that zone. Wider ranges cover more time but dilute your units. Where you park (price zone) and how crowded it is determine how much you actually earn.
2. Why did my rewards drop even though the price stayed in my range?
Even if price remains in your chosen range, your earnings can still drop due to:
Competition increasing → more LPs enter your zone, your share of fees shrinks.
Fee volume changing → if trading activity slows down, total fees generated in your zone fall.
Subsidies ending or reducing → if boosted rewards (e.g., drips, incentives) decrease, APR also declines.
Practical Meaning 👉 Even if price never leaves your range, competition/fees generated/subsidies change directly reduce your fee share. That’s why Position APR is dynamic: it depends not just on where the price is, but on how many other LPs are active at the same spot.
3. Why did I provide liquidity for one full day but earn almost nothing?
Several factors can cause low earnings despite “being in the pool all day”:
Inactive range: If the price rarely enters your zone, your LP Units don’t count.
Wide range: You mint fewer LP Units per token, diluting your active share.
High competition: Active Pool LP Units are large, shrinking your slice.
Low-fee period: Fees fluctuate; Pool APR is based on historical averages, not your actual day.
Practical Meaning 👉 “Active for a whole day” doesn’t guarantee returns. What matters is how often the price is inside your range, how concentrated your funds are, and how many others share the zone. Wide, unfocused ranges look safe, but usually produce very low earnings.
Last updated