How to Choose the Right Price Range on Yuzu LP Positions
A guide to capital-efficient liquidity provisioning
Introduction
Providing liquidity on Yuzu isn’t just about depositing tokens and waiting. It’s about precision.
Yuzu’s Concentrated Liquidity Market Maker (CLMM) lets liquidity providers define where their capital is active — by setting a custom price range. This focused approach unlocks far greater capital efficiency than traditional models.
But with this flexibility comes the need for informed decisions. If your range is too wide, your capital is underutilized. Too narrow, and your position may temporarily stop earning. Choosing the right range, pool, and fee tier is key to maximizing your returns on Yuzu.
This guide walks through how to approach range selection, manage your position using Yuzu’s LP-NFTs, interact with custom ticks, and select the most suitable fee tier.
How Ranges Work on Yuzu
Every liquidity position on Yuzu is defined by two parameters:
- A lower price
- An upper price
When the market price is inside your range, your position is active — earning swap fees and incentives (when applied).
When the price moves outside your range, your position becomes inactive. It holds one of the two tokens and stops earning until the price returns.
Your position only earns while active. A well-placed range helps ensure continuous performance.
Full-Range vs. Concentrated Liquidity
Yuzu supports two primary ways to provide liquidity:
- Full-range: Covers the entire price curve. Your position is always active, but fee returns per dollar are lower due to how capital is spread.
- Concentrated range: Focuses your liquidity around a specific price range — often close to current market price. This increases capital efficiency and potential returns, as more of your capital is actively used where volume occurs.
Most LPs opt for concentrated ranges to maximize efficiency, but full-range positions can be helpful for long-term, passive exposure.
Choosing the Right Range Width
Once you’ve chosen to concentrate your liquidity, the next step is deciding how wide or narrow that range should be.
- Narrow ranges concentrate capital tightly around the current price. These tend to generate higher returns per dollar, as liquidity is more fully utilized. You may need to adjust more often as price moves.
- Wider ranges cover a broader zone. They tend to stay active longer through typical price variation. Fee income per dollar is more consistent, but spread across a wider band.
You can also use multiple positions at different ranges. For example, a tight range near the current price and a wider range for broader coverage.
There’s no single correct approach — your range should match the volatility of the asset and how actively you want to manage it.
Example: Three LP Strategies
Assume the current price is $1.00.
- LP A sets a narrow range: $0.99–$1.01
- LP B uses a moderate range: $0.95–$1.05
- LP C sets a wide range: $0.80–$1.20
If the price stays near $1.00:
- LP A captures the most fees and incentives per dollar
- LP B earns moderately
- LP C earns less per dollar but stays active longer
If the price moves to $1.08:
- LP A and B stop earning
- LP C continues earning without repositioning
Aligning Your Range with Volatility
Different asset types move in different ways:
- Stable pairs (e.g. stablecoins) benefit from tight ranges, since price rarely moves far from peg.
- Volatile pairs often require wider ranges to maintain uptime as the market moves.
Because Yuzu is built on Movement, repositioning is fast and inexpensive. LPs can adjust often without gas overhead, allowing them to manage positions dynamically if needed.
Understanding Fee Tiers
When selecting a pool on Yuzu, you’ll also choose a fee tier. This determines the swap fee traders pay, which is distributed to LPs.
Yuzu currently supports four fee tiers:
- 0.01% — Ideal for very stable, low-volatility pairs (e.g. USDC/USDT) where spreads are tight
- 0.05% — Suitable for stable-ish tokens or blue-chip pairs
- 0.25% — A good general-purpose tier for most token pairs
- 1.00% — Best for high-volatility or low-liquidity tokens where LPs require more compensation
Higher fee tiers offer higher potential returns per swap, but may attract fewer trades due to wider spreads. Lower fee tiers often have tighter execution and higher volume, but less revenue per trade.
Tip: Some pairs exist at multiple fee tiers. You can experiment with different positions across tiers based on your goals.
Using Custom Ticks and Multiple Positions
When adding liquidity on Yuzu, you define your price range using custom tick intervals.
You can:
- Select exact upper and lower ticks, which define the price range of the pair relative to each other
- Add multiple positions with different ranges and sizes
- Grow or reduce liquidity per position at any time
Each position is independent, so you can stack narrow and wide ranges, test different strategies, or rebalance gradually.
NFT-Based Liquidity Positions
On Yuzu, each position you create is minted as an NFT. This NFT represents your ownership of that specific range.
The NFT:
- Tracks your chosen tick range
- Records your deposited amounts
- Accrues swap fees and incentives
- Can be adjusted, topped up, or withdrawn anytime
You can manage one or many positions at once. The NFT-based model gives you full control over every range and strategy you deploy.
Step-by-Step Guide: How to Add or Manage a Position
1. Add a New Position
- Visit app.yuzu.finance/pools
- Connect your wallet
- Select a pool and fee tier (e.g. YUZU/USDC at 0.25%)
- Set your price range using the slider or tick input
- Enter token amounts and click Add Liquidity
- Confirm the transaction to mint your NFT
2. Increase Liquidity in an Existing Position
- Go to Your Positions
- Select a pool
- Click Add Liquidity
- Enter token amounts to top up
- Confirm
3. Decrease or Remove Liquidity
- In Your Positions, select a pool
- Choose Decrease Liquidity
- Withdraw partially or fully
- Confirm and receive tokens in wallet
- Optional: After decreasing 100% of your position, you can also call the Close Position function, to burn your NFT. This will automatically claim all pending fees and rewards.
4. Add a New Position at a Different Range
- Navigate back to the pool
- Select a new range or fee tier
- Click Add Liquidity
- Deposit tokens
- Confirm — a new NFT will be created
When to Reposition
Repositioning is optional and easy on Yuzu. You may choose to reposition when:
- The price has moved out of your selected range
- You’ve formed a new view on where activity will concentrate
- You want to change fee tier or update your strategy
Thanks to Movement’s low-cost execution, you can reposition frequently without gas concerns.
Best Practices
- Use recent volatility data to guide range selection
- Mix wide and narrow ranges to balance uptime and fee capture
- Choose fee tiers that match asset behavior and your return targets
- Reposition with intention — not reaction
- Track performance regularly and evolve your strategy
Conclusion
Yuzu offers precision tools for liquidity providers who want more control, more efficiency, and more optionality.
By selecting thoughtful ranges, leveraging multiple positions, and choosing the right fee tiers, you can structure a liquidity strategy that fits your goals — whether passive or performance-focused.
Every range is a decision.
Every NFT is a position.
Every tick is a tool.
Use them with purpose — and let your liquidity work where it earns most.
Start providing liquidity on Yuzu today:
