What exactly is CLMM doing? Simply put, it turns liquidity into an actively manageable asset.

What is the traditional approach? You think the price will fluctuate within a certain range, so you concentrate your principal within that price range. This way, when the price indeed moves within your expected range and traders come to trade, you can earn trading fees.

But here’s the key point—if the price fluctuates significantly and moves outside your set range, your funds stop working. It’s not a loss, but idle. Only when the price returns to the range can liquidity re-engage.

This design gives liquidity providers a choice. You can flexibly adjust your capital deployment based on market expectations, rather than passively bearing the risk of price fluctuations across the entire range. To some extent, this is an evolution in DeFi liquidity management.