What is the price range?

Price range is the minimum and maximum prices that you expect your position to move within.

On Algebra, you can provide liquidity at a specific price range. To farm with your liquidity, you need to choose the asset's price range, so to say, predict the price limits within which the coin will be traded, and get the profit. The more precisely you set it, the bigger your profit will be. In case you make a mistake in the price range prediction and the token’s price doesn’t appear in this range, you won’t get the commissions.

Let’s imagine the ALGB price is $0.15 at the moment. You enter the ALGB/USDC pool and set a precise $0.14–0.16 range. In this scenario, if the ALGB price remains within these borders, you can get up to 500% APY and even more (also based on your provided liquidity). If the price fluctuates and goes higher or lower than the indicated limits, you will get lower APY. In case you set the wrong range, you won’t get extra income.

The reward will be distributed among the participants based on a chosen range and provided liquidity. Basically, you will get what you placed + the rewards.

Now, let’s imagine that the ALGB price is $0.15, and you choose a broad range of $0.10–0.20. In this case, you have better chances to guess right and earn on LP farming, but the profits will be lower than if you set the range more precisely.

When taking part in the incentive campaign, you won’t be able to change the range, stop farming, or withdraw till the end of it.

How to choose price ranges?

When making a price range decision, you should take into account the following:

• the degree to which you think prices will move over the course of your position's lifetime; 
• your willingness to actively manage the position as the market evolves;
• the economics of transactions required to actively manage a position.

If the price moves outside your specified range, then your position will be concentrated in one of the two assets and will not earn trading fees until the price returns to their range. 

Note that your price will snap to the nearest tick. Don't worry if you're unable to type in a nice round number. This is expected because of how ticks work in Algebra.

Instead of picking a price range, you can provide liquidity across the full range like in v2 DEXs by clicking the Full Range button. However, keep in mind that your rate of return will be significantly lower than on a similar position with a narrower price range.