Compare ranges by estimating the fees your position might earn while it is active, then weigh that estimate against the chance the price will leave the range. A narrower range can earn a larger share of fees when the market stays inside it, but it can stop earning sooner if the price moves away.
Set up a fair comparison
- Choose one pool and one amount of capital. Compare alternative ranges for the same token pair, fee tier and deposit value. Otherwise, a difference in expected fees could come from different trading activity or pool fees, rather than the ranges themselves.
- Write down the current price and candidate ranges. For a token priced at $100, you might compare a narrow $95–$105 range with a wider $85–$115 range. These are illustrative bounds, not recommendations; choose alternatives that reflect how far you think the price could move over your intended holding period.
- Estimate how often each range will be active. A concentrated-liquidity position earns swap fees only while the pool price is inside its range. If the price rises above the upper bound or falls below the lower bound, the position becomes one-sided and stops earning fees until the price returns. The Uniswap Developers’ concentrated-liquidity documentation explains this general mechanism.
This comparison is the core of a concentrated-liquidity position on Solana: your selected range determines where your capital is available for swaps. If you also need the broader context on swaps and liquidity, what Byreal offers for Solana swaps covers that subject. Byreal is a Solana DEX incubated by Bybit, and its official app is one place to put a liquidity strategy into practice.
Estimate each range’s share of fees
- Estimate the pool’s fees over your chosen period. For a simple example, suppose the pool trades $100,000 a day and the assumed swap fee is 0.30%. That would mean about $300 in gross swap fees for the pool that day, before any applicable fee splits. Both numbers are example inputs, not current Byreal rates or forecasts.
- Estimate your share of active liquidity. Your share depends on how much liquidity your position contributes compared with all liquidity active at the prices where swaps occur. Suppose an analysis estimates a 10% share for the narrow range while active and 4% for the wide range. Those figures must come from pool data or an explicit modelling assumption; range width alone does not tell you your fee share.
For a worked comparison, assume the narrow position is active 60% of the time and the wide one 95% of the time. A rough daily estimate is $300 × 10% × 60% = $18 for the narrow range, versus $300 × 4% × 95% = $11.40 for the wide range. Over 30 days, that is about $540 versus $342 in gross fees if the assumptions hold steady.
The useful result is the trade-off: the narrow range projects more fees in this example, but it also spends more time inactive. The Uniswap v3 whitepaper describes the underlying idea of concentrating liquidity within selected price bounds. Actual fee share changes with competing liquidity and where trades happen, so treat this arithmetic as a comparison model, not a promised return.
Adjust the estimate for what can change
- Use realistic volume and price scenarios. Estimate trading volume for your holding period rather than assuming today’s busy day repeats. Check a lower-volume case as well as your central estimate; if the narrow range only looks attractive under unusually high volume and a steady price, that fragility matters.
- Account for costs and inventory changes. Gross fees are not profit. Subtract any transaction costs for opening, closing or adjusting the position, and compare the ending token mix with what you would have held without providing liquidity. As swaps execute, the position can accumulate mostly one token; if the price then keeps moving, the value of that mix may differ from simply holding the original tokens.
A common edge case is a price that briefly leaves a narrow range, then returns. A day-end price inside the range does not mean the position earned fees all day: it earns only during the time it is active, and its fee share can vary as other liquidity enters or leaves. For a practical estimate, split the period into plausible price paths or use a conservative active-time assumption.
Choose a range you can manage
- Compare the estimate with your willingness to monitor and adjust. A narrow range may need more frequent attention, and each adjustment can add costs. A wider range may project lower fees per dollar while giving the price more room to move before the position goes inactive.
Before acting, write down the price bounds, the assumed volume, your estimated fee share, the expected active time and the adjustment costs. Byreal can be used to provide concentrated liquidity on Solana, but the estimates remain sensitive to future trading and price movement.
Ask yourself: if the price leaves my chosen range and my fee estimate falls, am I still comfortable holding the resulting token mix?
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