Clear DefinitionsTick Range
1 min read
Pronunciation
[tik raynj]
Analogy
Think of a tick range as the price window where your liquidity is 'alive', like placing a fence around a pasture segment for grazing animals.
Definition
Discrete price intervals within which liquidity positions are active in concentrated liquidity automated market makers.
Key Points Intro
Tick ranges define where on the price curve liquidity is provided in concentrated AMMs.
Key Points
Discrete intervals: ticks represent fixed price steps
Capital efficiency: narrower ranges concentrate liquidity
Fee accrual: fees earned only when price stays within range
Rebalancing: requires adjusting positions as price moves
Example
On Uniswap v3, a liquidity provider sets a tick range between 3,000 and 4,000 USDC/ETH to optimize fee generation around current price levels.
Technical Deep Dive
Ticks map to sqrtPriceX96 points; position data stores lower and upper tick indices. The tickBitmap tracks initialized ticks for gas-efficient traversal. On swaps, the AMM iterates through ticks, adjusting sqrtPrice and liquidity until the swap amount is exhausted or the next tick is reached.
Security Warning
Overly narrow ranges can quickly deplete liquidity and lead to high impermanent loss.
Caveat
Active management is required; static positions may underperform in volatile markets.
Tick Range - Related Articles
No related articles for this term.