Leveraged Concentrated Liquidity Manager (CLM)

Overview

A Concentrated Liquidity Manager (CLM) is a DeFi infrastructure component designed to optimize liquidity provision on automated market makers (AMMs) such as Uniswap V3. Unlike traditional liquidity provision—where liquidity is distributed uniformly across all price ranges—concentrated liquidity allows users to allocate their capital to specific price bands. This boosts capital efficiency, enabling LPs (liquidity providers) to earn higher fees with less deployed capital.

The CLM automates this process by actively managing liquidity positions within a predefined range, rebalancing as market prices move. This removes the manual complexity for users and reduces the risk of inefficient capital deployment.

Dual-Position Design

Our CLM goes a step further by using a dual-position system: a main position and a secondary position. This architecture ensures that:

• Main Position: Holds the majority of liquidity within the optimal price range, capturing the bulk of trading fees.

• Secondary Position: This position is more dynamic and acts as an overflow mechanism. Its price range is always half the width of the main position, and it is placed either above or below the main range—depending on which token we have an excess of after rebalancing. For instance:

  • If we hold more of token A, the secondary position is placed in the lower half of the main range.

  • If we hold more of token B, it’s placed in the upper half.

This strategy ensures that no matter how the portfolio skews post-rebalancing, surplus tokens are still earning fees within a narrower, targeted price band—rather than sitting idle. It also helps minimize slippage and capital inefficiency during volatile market movements.

Leverage for Advanced Users

For more experienced and risk-tolerant DeFi participants, our protocol supports leveraged liquidity provisioning. Users can borrow additional funds (in supported tokens) against their collateral or LP position to amplify their exposure in the CLM.

Key benefits of leveraged CLM:

• Increased Fee Yield: More capital in the liquidity positions means higher potential fee earnings.

• Optimized Capital Efficiency: Leverage lets users do more with less upfront capital.

• Composability: Leverage integrates seamlessly with our CLM, meaning leveraged positions still benefit from active management and dual-position optimization.

However, leveraged positions are inherently riskier. They are subject to:

• Liquidation Risk: If the underlying asset price moves against the position.

• Increased Impermanent Loss: Amplified by borrowed capital.

• Higher Volatility Exposure: Gains and losses are both magnified.

Protocol Fee

Our CLM strategies currently have a 8% performance fee.