VaporDEX
  • Introduction
    • Welcome to VaporDEX
  • VaporDex
    • Swap & Aggregator
      • How to Swap
      • Who do we Aggregate through?
    • Liquidity Pools
      • Overview of LP Pools
        • What are LP Pools & IL
      • Creating a new pool
      • Launching a token
      • Add to existing Liquidity Pools
      • Concentrated Liquidity Pools
        • Capital Efficiency
        • Active Liquidity
        • Range Limit Orders
        • Mitigating Risk
        • Concentrated Liquidity Vs Standard Pools
      • Telos on VaporDex
    • Bridge
      • How to Bridge?
    • Fiat On and Off Ramping
      • Mt Pelerin
      • Onramper
    • Vape Token
      • Introduction to Vape
        • What is VAPE?
        • Why a new token?
        • The Expanded Role of VPND
        • Role of VAPE in our ecosystem
        • Governance for VaporDEX and VAPE
        • VaporDEX Fee Harvesting
        • Primary Markets for Vape
          • Which market to earn VAPE is right for you?
        • Supply
          • Allocation of initial supply
        • Emission Types
          • Genesis Pool (Direct Emissions)
          • Liquid Staking (Direct Emissions)
          • Enhanced Staking (Indirect Emissions)
          • Stratosphere Rewards
        • VAPE manufacturing & node-powered infrastructure
        • FAQ's
          • Will I need a node in order to manufacture VAPE?
          • Why do we need manufacturing, it seems unnecessary?
          • What if I don’t want to participate in manufacturing, can I sell my materials or transfer them to so
          • Why should I bother manufacturing VAPE?
          • How many nodes can I stake on buildings?
          • Will staking my node on a building burn my TVL?
          • If I stake my node on a building, will it still earn VPND from the VaporNodes reward pool?
          • Will a 10K Node be more powerful than a 10M node in the manufacturing process?
          • Do I lose VAPE materials that I deposit into a building, but fail to be refined, processed, or token
      • Genesis
        • What is the Genesis Pool?
        • How does the Genesis Pool work?
        • How does the Genesis Pool work?
        • How do you determine how much VAPE you will be able to claim from the Genesis Pool?
        • How does the Genesis Pool allow the community to determine the true value of VAPE?
        • Initial Evaluation
        • Market Valuation
        • Role of Various Community-Driven Valuations
        • What to expect from VaporFi Labs during the Genesis event?
    • Liquid Mining
      • VPND Liquid Mining
        • Participation & Eligibility Overview
        • Seasons Concept Overview
        • Overview of Components
          • Deposit VPND
          • Purchase a Mining Pass
            • How Do we Split Mining Pass Fees?
          • Withdraw VPND
            • Early Unlock VPND Cooldowns
          • Claim VAPE
          • Boost Score
        • Mining Mechanics
          • Mining Seasons
          • Seasonal Scoring
          • Boost Impact
        • Token Allocation & Reward Distribution
      • VAPE Liquid Mining
        • Reward Distribution Model
    • Token Factory
      • Anti-Bot and Anti-Whale Features
      • Technical Simplicity
      • Token Launch Considerations
      • Fees
    • Ads
    • Supported Chains
      • Avalanche
      • Telos
      • Apechain
  • Stratosphere
    • What is Stratosphere?
      • How to see your soul bound NFT from Stratosphere
      • How to enroll in Stratosphere
      • Stratosphere FAQ
  • Developers
    • Github repositories
    • Contracts
    • Audits
  • Support
    • Where to get help?
  • Social Media
    • Twitter
    • Discord
    • Medium
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  1. VaporDex
  2. Liquidity Pools
  3. Concentrated Liquidity Pools

Mitigating Risk

Concentrated Liquidity pools and more specifically the capital efficiency that it provides allows liquidity providers to mitigate their risk to a certain extent. With the ability to earn the same kind of returns with much less capital liquidity providers do not have to expose as much assets as they would have otherwise with Standard Liquidity pools. That's not to say that there is no risk and in fact the potential for things like impermanent loss may have a greater impact and occur with more frequency in Concentrated Liquidity pools but concentrated liquidity definitely provides liquidity providers with more control to fine tune what kind of risk they are taking and can limit that risk if done thoughtfully.

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Last updated 1 year ago