What Out of Range Means for Concentrated Base Liquidity

On Base, a concentrated-liquidity provider sets a price band for a token pair, and the position stops supplying active liquidity when the market price moves outside that band. The position remains on the pool, but it no longer earns swap fees until the price returns or the provider changes the range.

Each position defines a lower and upper price for the pair. The pool uses that liquidity for trades only while its current price sits between those bounds; tighter bands put more of the deposited capital to work within a smaller price span. For background on the exchange mechanics, read how BaseSwap swaps and liquidity work. The same range logic applies to concentrated-liquidity pools on Base.

What happens when a position goes out of range?

When the price crosses either boundary, the pool’s rules leave the position inactive and its holdings settle into one token. Below the lower bound, the position is generally all the first token in the pair; above the upper bound, it is generally all the second, depending on how the pair is ordered.

That conversion is part of how the pool trades through the range, not a separate sale triggered by the provider. If the market later moves back inside the chosen band, the position can become active again without being recreated, though fees depend on trades occurring while it is active.

Why choose a narrow price range?

A narrower band concentrates capital where the provider expects trading to happen, so a given deposit can supply more liquidity within that span. The trade-off is that ordinary price movement can take the position out of range sooner, cutting off fee income until it becomes active again.

• Inside the band: both tokens may be held, and the position can support swaps and accrue fees.
• Below the band: the position is inactive and typically holds only the first token.
• Above the band: the position is inactive and typically holds only the second token.
• Back inside: the existing position can resume supplying liquidity as the price re-enters its range.

What should a liquidity provider check?

Before choosing a range, check which token the displayed price measures against, where the current price sits, and how far the bounds are from it. A range close to the current price may use capital more intensively, but it also leaves less room for price movement before fees stop accruing.

Providers should also compare the value of the position with simply holding the deposited tokens: swaps change the position’s token mix, and the final value can differ from holding both. The practical next step is to monitor the pool price and position status, then decide whether to wait for the price to return or adjust the range; changing it can require withdrawing and redepositing liquidity and may incur network costs.