💹Concentrated Liquidity AMM
Overview StoryHunt’s Concentrated Liquidity AMM is designed to maximize fee earnings for liquidity providers and reduce slippage for traders. By allowing LPs to concentrate their capital within specific price ranges, this approach boosts capital efficiency—so smaller pools can handle bigger trades, while liquidity providers earn more from each swap.
Key Advantages
Higher Returns for LPs
Concentrated Capital: Rather than spreading liquidity across the entire price spectrum, LPs focus on a specific range.
Increased Fee Capture: Because trades within that range use a larger proportion of your liquidity, fees accumulate faster.
Reduced Slippage for Traders
Deep Liquidity Where It Counts: Concentrating liquidity in active trading zones keeps price impact lower for most swaps.
Better Execution: Traders enjoy more favorable rates with less price fluctuation.
Greater Capital Efficiency
Smaller Pools, Bigger Impact: Each dollar in the pool works harder, allowing pools with relatively modest liquidity to accommodate sizable trades.
Adaptable Ranges: LPs can adjust price ranges based on market conditions, optimizing where their liquidity is deployed.
Dynamic Positioning
Active Management: Liquidity providers can change their price ranges as the market shifts, staying in the “sweet spot” for earning fees.
Risk Management: By selecting tighter ranges, LPs can reduce impermanent loss if they closely track asset prices.
How It Works
Select a Pool & Tokens
Choose a token pair on StoryHunt that supports concentrated liquidity.
Set Your Price Range
Define the price boundaries where you want to allocate your liquidity.
You’ll earn fees only when trades occur within that range.
Deposit Liquidity
Provide tokens. Your Liquidity Provider (LP) position is tied to the specified price range.
Earn Fees & Adjust
Accumulate fees from trades.
Update or “rebalance” your range as needed to remain effective.
Example Scenario
Pair: STORY/USDC
Market Price: 1 STORY = 1.00 USDC
Chosen Range: 0.90 to 1.10 USDC
Most trades occur around the current price.
By concentrating within this narrower band, an LP earns a higher percentage of trading fees happening in that active zone.
Outcome:
As long as the price stays between 0.90 and 1.10 USDC, your capital is fully utilized and captures a larger share of swap fees.
If the price moves outside this range, you can reposition or let the market come back into range.
Benefits for the Ecosystem
Enhanced Liquidity: With LPs actively managing ranges, the markets can remain liquid even during periods of volatility.
Better User Experience: Traders get lower slippage and better pricing, driving more volume.
Sustainable Rewards: Concentrated liquidity encourages more engaged LPs, leading to a stable source of fees.
Concentrated Liquidity AMM on StoryHunt represents a benefit in both LP profitability and trading efficiency. By focusing liquidity in the most active price zones, providers earn higher fees, and traders get better trade execution—making StoryHunt’s DEX a powerful hub for IP and DeFi alike.