Providing liquidity

Providing liquidity means putting two tokens in a pool so others can trade against them. Every trade inside your price range pays you a share of the pool fee.

Ranges, not blankets

ARCO pools are concentrated. You do not spread your tokens over every price from zero to infinity. You pick a range. While the price is inside it, your capital is working and earning. When the price leaves, you end up holding only one of the two tokens and you stop earning until it comes back or you move your range.

• Tight range
  More fees per dollar while the price stays in. More time out of range, more attention needed.
• Wide or full range
  Fewer fees per dollar. Almost never out of range. The set and forget option.

Reading the arch

The crown is the price now. Drag the two handles to set the lowest and highest price of your range: the span between them lights up, the rest stays a wire cage. Push both handles to the feet and you have full range. The quick buttons (Full range, ±5%, ±15%, ±50%) set the handles for you, and Custom lets you type exact prices. On a position you already own, the crown is green while the price is inside your range and red once it leaves.

The three shapes

Inside your range you can also choose how the capital is spread.

A shape says how deep the liquidity is along your range. Beans say how many slices that range is split into: 5 by default, anywhere from 1 to 25, set beside the arc. All of them open in a single transaction and live under one NFT, so you collect, add and close the whole position at once. More beans cost more gas to open and to close. Spot with one bean is a single, plain position.

Adding liquidity, step by step

1. 1
   Pick a pool

   Open Pools and choose the pair. The same pair can exist at more than one fee: higher fee pools earn more per trade but usually see fewer trades. Rows tagged with another venue are read only; liquidity goes into ARCO pools alone.
2. 2
   Set the range and the shape

   Use the arch or the quick buttons. The panel tells you how much of each token the range needs at the current price.
3. 3
   Type an amount

   Fill one side and the other is worked out for you. If the range sits entirely above or below the price, only one token is needed.
4. 4
   Approve, then add

   First use of a token needs an approval. Then confirm the add. Your position shows up under Positions.

Your position is an NFT

Each position lives in your wallet as one NFT, however many beans it has. Whoever holds it owns the liquidity and the fees, so treat it like the money it is. From Positions you can collect fees any time without touching the liquidity, add more, or close the position and get both tokens back plus anything uncollected.

The split

Of every fee a pool earns, liquidity providers keep 87.5% and 12.5% goes to TARCO lockers. Your share of the 87.5% depends on how much of the active liquidity at the traded price is yours.

What can go wrong

There is no lock on liquidity. You can close a position whenever you want, in range or out of it.