A tick range sets the prices where your liquidity can help trades and earn fees. Pick its lower and upper bounds around prices you can tolerate; if the market moves outside them, your position stops earning trading fees until price returns or you adjust it.
A tick range marks where your liquidity is active
A tick is a small price step used by some automated market makers, or AMMs: trading systems that set prices from the assets in a pool. A tick range is the band between two chosen price boundaries. Your deposited assets support trades only while the pool price is inside that band.
For example, suppose one ETH currently trades for 2,000 USDC. A range from 1,800 to 2,200 USDC per ETH would keep your liquidity active while the price stays between those bounds. Uniswap’s v3 documentation describes this approach as concentrated liquidity; the Uniswap v3 whitepaper explains how ticks mark price steps.
Tick ranges help explain how some pools work, but they do not describe every swap design. For a separate guide to how Chainflip routes around congestion, read about what can happen when a destination chain is busy.
Tick boundaries turn your price choices into pool rules
Each tick corresponds to a price ratio. In Uniswap v3, the ratio changes by a factor of 1.0001 per tick, before adjusting for which token is quoted and their decimal places. That makes one tick about a 0.01% price step, though a pool may require boundaries to land on wider intervals called tick spacing.
Tick spacing sets which boundaries a pool allows. It depends on the pool’s fee tier, so a narrow range you have in mind may need to be rounded to the nearest allowed ticks. The usable price band can therefore be slightly wider or narrower than your chosen numbers.
The pool’s current price determines whether your range is active. If price is within your range, your position holds some of each asset; as price moves, their proportions change. In the ETH and USDC example, a fall below 1,800 leaves the position holding ETH, while a rise above 2,200 leaves it holding USDC.
A narrower band uses capital more intensely
A tighter range puts more of your capital to work near the current price. That can provide more liquidity for trades in that band with the same deposit, but it also makes it easier for price to leave your range. Once that happens, your position is inactive and earns no trading fees until it becomes active again.
A common mistake is choosing a very tight band because it seems more efficient. The fix is to choose boundaries based on how much price movement you can accept and how often you can check the position. A wider band may earn fees across more prices, while a narrower one needs closer attention.
Fee income also depends on trading volume and how much other active liquidity shares those trades. A narrow band does not guarantee higher earnings. If you move the range, you may need to add or remove assets and pay transaction costs, which vary by network and conditions.
Check the range and your asset balance before acting
Chainflip uses a different approach through its JIT AMM, a system that brings liquidity to swaps as needed. Tick ranges are useful for understanding pools that set fixed price bands, but do not assume every protocol uses them.
Before setting a range, check that the quoted price uses the asset order you expect. Then confirm the pool’s allowed tick spacing and consider what your position will hold above and below the band. A price that moves beyond either boundary can leave you holding only one asset, and returning to your old balance may require another trade.
Use this short checklist:
- Write down the price as a clear pair, such as USDC per ETH.
- Choose lower and upper prices you can live with.
- Check that the pool allows those tick boundaries.
- Decide how often you can review the position if price leaves the band.