Maverick liquidity modes control whether bins stay fixed or follow price movements

Bin Movement and Token Exposure

Moving bins relocates the price ranges where their liquidity can trade, bringing eligible reserves closer to price without requiring a manual repositioning transaction. A bin represents liquidity within a bounded price interval. As swaps pass through that interval, they change its token composition. Beyond either edge, liquidity can consist entirely of one pool token. Automatic movement can then relocate compatible single-token liquidity without exchanging it merely to change its price location.

Pool price expresses the base token’s value in quote tokens. Right means that relative price rises; Left means it falls. This direction concerns the pair, independently of either token’s price in another currency. Trading fees arise when swaps use the position’s liquidity, so a nearby bin can remain idle between trades.

Static Placement and Directional Tracking

The four modes specify different movement rules, while initial bin placement determines the inventory a position supplies to those rules.

Mode Static

Mode Static keeps liquidity at its chosen price intervals. It suits a fixed allocation across prices, including uneven distributions. Flat spreads liquidity evenly across selected bins; Exponential concentrates more around the center with decreasing amounts farther away. Single Bin concentrates the allocation into one interval. Leaving the selected range stops that liquidity from participating in swaps until price returns or the allocation changes.

One-Way Movement

Mode Right

Mode Right moves eligible bins toward higher prices and leaves them in place during downward movement. Its usual directional placement holds quote tokens immediately below the active range. As price rises, reconcentration keeps that liquidity nearby. Downward retracements can bring trading into its bin and generate fees. Holding quote tokens in this configuration does not automatically capture the base token’s appreciation.

Mode Left

Mode Left follows eligible downward movement without following price upward. Its usual directional placement holds base tokens immediately above the active range. Rising retracements can bring swaps into that liquidity during a broader downward trend. The mode tracks a falling relative price while the position remains exposed to its current token holdings between trades.

Mode Both

Mode Both permits movement in either direction. It can serve strategies seeking liquidity near a relatively stable trading relationship with smaller fluctuations. The position can change sides after trades convert its inventory through a price interval. Repeated large reversals create a different loss exposure from one-way tracking.

What Happens When the Price Reverses?

A sustained reversal can trade directional liquidity into the underperforming asset, while bidirectional reconcentration can crystallize losses across repeated changes of direction.

Falling price can exchange a Right position’s quote tokens for base tokens as swaps cross its bins. Right will not move those bins downward. Left has the mirrored exposure: rising price can exchange base tokens for quote tokens without upward tracking. The loss comparison uses the tokens originally deposited and their value if held outside the pool.

Mode Both can incur permanent loss when repeated reversals make the position buy high and sell low. Following a reversal, trades can fully convert the position’s inventory before the automated market maker (AMM) reconcentrates that liquidity to follow the reversed price trend. Further reversals can repeat that conversion at unfavorable relative prices. Returning to an earlier price does not necessarily restore reserves lost through those cycles. Impermanent loss, by comparison, measures divergence from holding and can shrink when relative prices recover. These are different effects, and a larger fee balance does not establish that either loss has disappeared.

Small retracements can generate fees for directional positions. Whether those fees cover adverse inventory changes depends on the actual trading volume and price path.

TWAP Timing and Pool Constraints

The pool’s time-weighted average price (TWAP), bin eligibility and swap activity govern automatic movement, so a brief spot-price jump need not relocate liquidity. TWAP smooths the pool’s price history and can lag its spot price. The contract checks movement conditions during swap processing. A pool’s lookback setting shapes the response rather than establishing a universal waiting period. Without relevant swap activity, passing time alone does not execute a bin shift.

V2 pools can permit a subset of the protocol’s modes, so the selected pool must support the intended choice. Movement rules also restrict which bins can relocate. Liquidity outside the eligible movement region can remain stranded until applicable price conditions return.

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Read a Rightward Bin Shift

A higher recorded tick confirms that an eligible Mode Right bin has relocated to a higher price range. A tick identifies a price interval in V2 accounting.

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In this hypothetical case, an existing V2 pool permits Mode Right and has sufficient static liquidity for normal trading. The position holds only quote tokens immediately below the active range. No other Mode Right bins participate in this shift or occupy its destination. Subsequent swaps move pool price and TWAP far enough right to trigger an eligible shift.

The AMM moves the bin to a higher tick. Comparing its recorded tick before and after the swap verifies that relocation. Its mode remains Right, and the quote inventory now occupies a higher price interval. Assessing returns requires valuing its token holdings and accounting for transaction costs. The LP pays no separate gas charge for this automatic movement. Later additions or withdrawals incur costs governed by transaction work and network gas prices, without a fixed cost implied by the mode.

Trading Fees and Range Width

Trading fees depend on swaps through supplied liquidity and the position’s proportional ownership, while range width changes how the deposit supports those trades. Maverick reinvests earned trading fees into pool reserves. An idle allocation does not earn trading fees merely because it uses a moving mode. Fee rates and trading demand belong to the selected pool, and movement alone supplies no fixed return.

Bin width sets each price interval’s size; distribution width describes the overall span an allocation covers. With a fixed deposit, a wider Flat distribution spreads liquidity more thinly across its covered intervals. Wider bins can require larger price swings before Mode Both’s reconcentration losses arise. They also change trading exposure, so width cannot establish profitability on its own.

Static Liquidity and Shared Strategies

Static liquidity supports price discovery and arbitrage around moving positions, helping the pool maintain the trading conditions those movement rules need. Thin static reserves can make unwanted movement through price manipulation easier. Arbitrage must offer enough value to justify its transaction cost; the necessary depth depends on pool conditions and network costs. V2’s movement design reduces some manipulation exposure, while adequate static depth remains relevant.

Boosted Positions package preset liquidity arrangements other providers can join, including arrangements using a movement mode. Their underlying bins retain the same inventory and reversal exposures. Staking the position’s share tokens for incentives is a separate reward mechanism. Additional rewards contribute to the overall return calculation. The selected mode still determines movement, and its price path can still cause losses.