Web3 Concentrated Liquidity Price Range & Yield Simulator
Web3 Concentrated Liquidity Price Range & Yield Simulator
Simulate capital efficiency multipliers, fee apr boosts, and out-of-range risk boundaries in concentrated AMMs like Uniswap v3.
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👉View Master Tools IndexUnderstanding Concentrated Liquidity and Capital Efficiency in Web3
Traditional Automated Market Makers (AMMs) distribute liquidity uniformly along an infinite price curve $(0, \infty)$. While simple, this approach results in high capital inefficiency, as the vast majority of pool liquidity remains unused at prices far removed from current market values. Concentrated liquidity protocols (pioneered by Uniswap v3) allow liquidity providers (LPs) to allocate capital within customized price intervals $[P_L, P_U]$.
By concentrating capital into narrower price ranges, LPs earn significantly higher trading fee revenues with far less principal. The Web3 Concentrated Liquidity Price Range & Yield Simulator calculates your exact capital efficiency multiplier, effective fee APR boost, and projected monthly fee yields.
Governing Mathematical Formulas
This client-side concentrated liquidity model computes multiplier factors using bounded square root price tick differentials:
- Capital Efficiency Multiplier:
Efficiency (x) = 1 / [1 - √(P_L / P_U)] - Simulated Effective APR:
Effective APR (%) = Base v2 APR × Efficiency Multiplier - Estimated 30-Day Fee Income:
30-Day Fees ($) = Capital × (Effective APR / 100) × (30 / 365) - Range Span Percentage:
Range Span (%) = [(P_U - P_L) / Current Price] × 100
Worked Calculation Examples
Consider the default inputs loaded into this calculator:
- Capital Investment: $5,000.00
- Current Asset Price: $3,000.00
- Lower Price Bound ($P_L$): $2,700.00
- Upper Price Bound ($P_U$): $3,300.00
- Base v2 Pool APR: 10.0%
Computing the bounded ratio: $P_L / P_U = 2,700 / 3,300 = 0.81818$. Taking the square root yields $\sqrt{0.81818} = 0.90453$. The efficiency multiplier is calculated as $1 / (1 - 0.90453) = 10.47x$ (adjusted dynamically for current price position). Multiplying the baseline 10% APR by this multiplier generates an effective concentrated APR of 102.50%, accumulating $421.23 in fee rewards over 30 days while price remains within bounds.
Frequently Asked Questions
1. What happens when the asset price moves outside my set price bounds?
If the market price drops below your lower bound ($P_L$), your position is converted entirely into the riskier asset, and fee collection stops. If the price rises above your upper bound ($P_U$), your position is converted entirely into the paired stablecoin/base asset, and fee collection pauses until price re-enters the range.
2. Is impermanent loss higher in concentrated liquidity positions?
Yes. Because your capital is concentrated into a smaller price window, price movements cause faster inventory shifts, amplifying impermanent loss compared to traditional full-range AMM pools.
3. How do I choose the optimal price range width?
Narrow price ranges maximize fee APR boosts but require frequent rebalancing and increase out-of-range risk. Wider price ranges provide lower multiplier boosts but require less management and sustain fee collection during volatile market swings.
4. What are automated liquidity management vaults?
Protocols like Arrakis, Gamma, or Gelato automatically rebalance concentrated LP ranges using smart contracts, optimizing fee collection while reducing manual transaction gas expenses for individual LPs.
5. Is this concentrated liquidity simulator private and secure?
Your inputs are not sent to our servers. All calculations execute locally in your browser using JavaScript logic. The page may still load standard third-party ad services.
Last updated: October 2026
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