What is single-sided liquidity?#
Single-sided liquidity refers to a position that holds only one of the two tokens in a pool.
Single-sided liquidity happens when the current price of a pool moves outside a position's set price range due to swap activity.
Liquidity providers can also add single-sided liquidity intentionally by setting a position's price range entirely above or below the current price in a pool. While out of range, a provider can add liquidity using only one of the two tokens.
Important: Single-sided liquidity is out of range and does not earn fees until the current price of the pool moves into the set range. This is only possible with concentrated liquidity on CenturionDEX v3.
For example, a provider can set a range above the current price (contributing only the token that price would convert into as it rises) or below the current price (contributing only the other token). In both cases the position is inactive until price enters the range.