Concentrated Liquidity on Tokenized Equities
Concentrating a range multiplies your fee income and your risk of going idle. Here is how to size one against an asset that gaps at the open.
Concentrated liquidity lets you put your capital in a price range instead of across the whole curve. Inside the range you earn far more per dollar. Outside it you earn nothing.
For tokenized equities that trade 24/7 against an underlying that does not, the second half of that sentence deserves more attention than it usually gets.
What does concentration actually buy you?
Capital efficiency. A position spanning ±1% of spot provides the same depth at spot as a full-range position many times its size — so the same fees are earned on far less capital.
| Range width | Roughly how much more efficient | Time in range |
|---|---|---|
| Full range | 1× | Always |
| ±10% | Tens of × | Usually |
| ±1% | Hundreds of × | Often not |
The third column is the one that costs people money.
How wide should the range be?
The useful question is not "what maximises APR" but "what fraction of the time will price be inside this". A range that earns 100× while active but is active 20% of the time is not obviously better than a range that earns 20× and is always on — and it is much more work.
Two inputs specific to tokenized equities:
Overnight and weekend drift. Price moves while the underlying market is shut, with nothing anchoring it. A range that assumes continuous discovery will be outside it by Monday more often than the volatility alone suggests. This is covered in Trading Tokenized Stocks 24/7.
Gaps at the open. Equities gap. Tokens tracking them gap harder, because the pool has to reprice against arbitrageurs the moment a real quote exists.
The practical upshot: for a 24/7 tokenized equity, be wider than you would be for the same volatility on a continuously traded asset.
What are you actually holding?
Inside a range, your position is a mix of both tokens that shifts as price moves. Price rises, you hold more of the quote and less of the asset. That rebalancing is automatic, and it is the same mechanism as impermanent loss — covered in What Is Impermanent Loss on Stock Tokens?.
If you are bullish on NVDA and provide NVDA/USDG liquidity, a rally leaves you with less NVDA than you started with. LPing is not a way to be long.
Where Alandale fits
Alandale runs Algebra concentrated liquidity with a dynamic fee — the rate widens as volatility rises rather than sitting at a fixed tier. For an asset that gaps at 09:30, a fee that responds to conditions is worth more to an LP than one that does not.
The pool page shows the live liquidity distribution decoded from the tick bitmap, so you can see where depth actually sits before choosing a range rather than guessing.
Live at the time of writing: 12 pools, $173,552 TVL, $129,632 24-hour volume, and 100% of fees to LUTE lockers.
Because emissions are directed by a weekly vote, an LP who also locks LUTE can steer incentives toward the pool they are already in — which is not something a fixed-tier AMM can offer.