Rebalancing Liquidity
On HyperBrick, only liquidity in the active bin—the bin matching the current market price—earns trading fees. This section explains how to monitor your position, respond to market moves, and stay in the fee‑earning zone.
1. Active Bin = Fee Factory
The active bin houses both tokens of the trading pair and serves as the only place trades execute.
As trades occur, LPs with capital in that bin receive a share of base fees (plus any surge fee, if volatility is elevated).
The UI highlights the active bin with a distinct color—your job is to stay in it.
2. Watch for “Out of Range”
As prices shift, your liquidity may move outside the active bin—this is called being out of position.
The UI typically signals this with a full-color bar (e.g., green or purple) and a warning indicator.
While out-of-position, you stop earning fees, even though your liquidity still exists in the pool.
Management Options for Out of Range Positions
When your position becomes inactive, here’s what you can do:
Do Nothing
Stay put and wait for the price to return to your bin. Avoids gas costs, but no fees are earned until the price swings back.
Reposition Liquidity
Withdraw and redeploy into bins aligned with the current price. Restores fee generation but incurs gas and potential swap costs.
Withdraw Entirely
Exit the position to hold tokens or invest elsewhere. Stops all earnings and may trigger tax implications.
Add Extra Liquidity
Deploy new funds into fresh bins near the active range while keeping your original position intact. Broadens exposure and potential fees—but increases capital at risk.
Each tactic has trade-offs. Consider gas costs, market behavior, and your LP strategy when deciding what to do.
What are some considerations when re-balancing?
Costs: Rebalancing involves paying for gas and buying and selling assets, which can incur trading fees. It can be helpful to consider these costs when deciding how frequently to rebalance.
Market conditions: Rebalancing on Liquidity Book should take into account market conditions, as different market conditions may require different rebalancing strategies. For example, in a volatile market, an LP may need to rebalance more frequently.
Last updated