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📊 TRADING & AMMS

Liquidity Shaping

Definition

Liquidity shaping is an evolution of concentrated liquidity where liquidity providers can define custom distribution patterns for their capital across price ranges. Pioneered by Maverick Protocol, it allows LPs to automatically shift their liquidity as prices move, maintaining optimal capital efficiency without manual rebalancing.

Example

💡 Example

On Maverick, an LP can choose a 'Mode Right' shape that follows ETH's price upward, keeping liquidity concentrated around the current price without manual adjustment.

Risks to Consider

⚠️ Risks
  • Novel mechanism risk
  • Smart contract risk
  • Liquidity mode selection complexity

Common Questions

How is liquidity shaping different from concentrated liquidity?

Concentrated liquidity (Uniswap v3) requires manual range selection and rebalancing. Liquidity shaping (Maverick) adds automatic directional movement modes that shift your liquidity with the price.

Related Terms

Related Articles

Staying Ahead of the Curve: the shift from Liquidity Mining to Liquidity Shaping

It’s been four months since Maverick is out, and a few days since the MAV token joined the fray. Yet, most of DeFi is still scratching its head regarding how Maverick delivers 2-3x the capital efficiency of its top competitor, Uniswap. So the time was right for a deep dive into the innovations brought by the model and the new paradigm it fosters regarding liquidity management: liquidity shaping. Innovations on DEX? More like tools for LP to express themselves Fundamentally, a decentralized exchange can innovate at two levels:
Staying Ahead of the Curve: the shift from Liquidity Mining to Liquidity Shaping