Concentrated Liquidity Is Live on Pact
Concentrated liquidity is now live on Pact.
It's the biggest change to how liquidity works on Pact since we launched. Instead of spreading your liquidity across every possible price, you choose the range where you want it to work. The same money goes much deeper where trading actually happens, and you earn a bigger share of the fees.
Here's how it works, why it matters for Algorand, and how to add your first position to ALGO/USDC.
How Concentrated Liquidity Works
In a classic pool, your liquidity is spread evenly across every price, from zero all the way to infinity. ALGO isn't trading at a tenth of a cent or at a thousand dollars, so most of that liquidity just sits there, unused.
A concentrated liquidity pool lets you pick a minimum and maximum price:
- While the price is inside your range, your liquidity is used by traders and earns fees. You hold a mix of both tokens.
- If the price moves outside your range, your position ends up entirely in one token and stops earning. It stays open, and starts earning again as soon as the price comes back. You can also remove it and set a new range.
- Fees compound automatically. Your share of every swap is added straight back into your position. There's nothing to claim.
A narrow range earns more while the price stays inside it, but goes out of range sooner and carries more impermanent loss. A wide range earns less per dollar, but stays active longer. You choose the trade-off.
Why It Matters
For liquidity providers, it's a better deal. Liquidity that sits where trades happen does far more work. Here's the 7-day fee APR for ALGO/USDC liquidity providers on November 10, with farm rewards left out so it's a like-for-like comparison:
| ALGO / USDC pool | Fee APR |
|---|---|
| Largest pool on a competing exchange | 4.3% |
| Pact classic pool (0.36%) | 5.9% |
| Pact concentrated pool (0.30%) | 35.2% |
The concentrated pool's number is pool-wide: total fees earned divided by the liquidity in the pool. Your own APR depends on the range you choose, since narrower ranges take a bigger share of the fees. It also moves day to day while the pool is young and still small.
For traders, it means deeper markets. Concentrated liquidity puts the same capital to work much closer to the current price. Take $100,000 of ALGO/USDC liquidity either way. In a classic pool, about $499 of it sits within 1% of the price. Concentrated within ±10% of the price, the same $100,000 provides about $10,194 there, roughly 20 times the depth where trades actually happen.
For Algorand, it's how DeFi stays competitive. Concentrated liquidity is the standard on the largest DeFi ecosystems because it makes every dollar of liquidity count. Bringing it to Algorand means deeper markets with less capital, better yields for the people who provide that liquidity, and a stronger foundation for everything built on top.
How to Add Liquidity to ALGO/USDC
1. Open the pool. Go to Pools and choose the CLMM filter, or open the ALGO/USDC pool directly. The top of the page shows the price, the fee, volume and the pool's fee APY. Under the chart, the liquidity distribution shows how much liquidity sits at each price. Below the current price it's held in USDC; above it, in ALGO.
2. Choose your range. On the Add tab you have two ways to do it:
- Simple: pick a timeframe and a strategy. Pact measures how much the price has moved over that window and sizes your range to match. Aggressive sets a tight range, Conservative a wide one, and Moderate sits in between.
- Advanced: type your own minimum and maximum price, use a quick range (±1%, ±5%, ±10% or ±25%), or drag the handles right on the liquidity chart.
3. Enter your deposit. Fill in one side and the app works out exactly how much of the other token your range needs at today's price. If your whole range sits above the current price you'll only deposit ALGO, and if it's below, only USDC. Either way, it won't earn until the price moves into it.
4. Check the estimate. The Est. fee APY box shows what your position would have earned recently. It's based on the pool's last 24 hours of fees, how often the price stayed in your range over the last 7 days, and your share of the active liquidity. It's an estimate, not a promise, but it's the quickest way to compare ranges.
5. Add liquidity. Connect your wallet, hit Add Liquidity and approve it in your wallet.
6. Track it and take it out whenever you like. Your dashboard lists every concentrated liquidity position with its range, whether it's in range, what it's worth, how it has done since you added it, and how that compares with simply holding the two tokens. The pool's Remove tab shows your positions too. When you're ready, remove a position and your tokens come back with your fees already included.
Pools Live Today
We're launching with five concentrated liquidity pools:
| Pool | Fee tier |
|---|---|
| ALGO / USDC | 0.30% |
| USDC / HAY | 0.30% |
| USDC / FOLKS | 0.30% |
| ALGO / POW | 1.00% |
| USDC / POW | 1.00% |
You'll find them all on the Pools page, where concentrated liquidity pools now appear first in the All view.
What's Coming Next
User-created pools. Anyone will be able to create their own concentrated liquidity pool soon. We're rolling this out gradually so our partners are properly integrated before pool creation opens up to everyone. If there's a pair you want right away, just reach out on X or Discord!
Did someone say airdrop? 👀 Rewards for early liquidity providers. We're putting together a rewards program for early concentrated liquidity providers. Full details are coming later this month, so it's a great time to get familiar with how ranges work.
Things to Know
- Outside your range, a position earns no fees and is held in a single token until the price returns.
- Concentrated positions carry more impermanent loss than a classic pool, and the narrower the range, the more it moves.
- Fee APRs change with trading activity and with how much liquidity is in the pool. Past fees don't guarantee future ones. Nothing here is financial advice.
Add Your First Position
The fastest way to see concentrated liquidity in action is to try it. Open the ALGO/USDC pool, pick a range that suits you, and start earning on every swap that trades through it.