Managing Out-of-Range Liquidity on Saros
Last updated
Last updated
To earn fees on Saros DLMM, your liquidity needs to be actively participating in trades — which only happens when it’s within the current price range, also known as the active bin. If the price moves outside your chosen range, your liquidity becomes inactive, and your position stops generating fees. This section covers how to identify that state and your options for responding.
The active bin represents the price range where trading is currently happening — and where your liquidity must be placed to earn fees. On the Saros UI, this bin is clearly visualized, helping you track if your liquidity is positioned correctly. If it is, your orders will appear as straddling the active bin.
When price moves and your liquidity falls outside of this bin, your position becomes inactive, meaning you no longer earn trading fees.
If the market price shifts beyond your selected liquidity range, your position is considered out of range. This means your liquidity is sitting idle, and the assets are no longer participating in swaps.
You’ll know your position is out of range via clear UI indicators — all of your shapes will appear in a single color (e.g., green or purple), showing they’re no longer straddling the current trading range.
Here are scenarios that explore the possible actions an LP might consider when remedy an out of position range:
Scenario:
Let’s say you’re a liquidity provider on Saros and you’ve deposited liquidity into the SOL/USDC pool, setting your range between $140 and $160 per SOL.
At the time of deposit, SOL is trading at $150, which means your liquidity is in range and actively earning trading fees from users swapping between SOL and USDC.
A few days later, Solana rallies due to strong market momentum, and the price of SOL climbs to $170 — pushing it outside of your selected range.
Your liquidity is now out of position, and you’ve stopped earning swap fees.
This is when you need to decide your next move — whether to wait, adjust your position, or take another route altogether.
If you’re okay with waiting, you can leave your position as-is.
Pros:
No need to pay gas or swap fees — Solana's low-cost network makes this option inexpensive If the price of SOL returns to your original range, your position will automatically start earning fees again
Cons:
Your liquidity won’t earn fees while out of range
Your asset balance may become skewed (e.g., mostly USDC if SOL continues rising)
You can withdraw your current liquidity and redeploy it into a higher price range that reflects the new market trend. For example, you could move your range from $140–$160 to $160–$180.
Pros:
Your liquidity becomes active again within the new range, allowing you to earn trading fees You maintain exposure to SOL if you believe the price will continue upward
Cons:
You’ll incur swap and transaction fees, though they’re relatively low on Solana
If the price reverses and drops back to the old range, you may need to reposition again, incurring additional costs and downtime.
If you’re not confident in the current range or want flexibility, you can choose to fully withdraw your liquidity.
Pros:
You’re no longer exposed to impermanent loss
You regain full control of your assets and can reallocate to other opportunities
Cons:
You’ll stop earning fees from the pool
Withdrawals may result in transaction costs and potential tax implications, depending on your jurisdiction
If you have extra capital, you can choose to provide additional liquidity at a new range (e.g., $160–$180) without removing your original position.
Pros:
You can earn fees across multiple price bands, increasing your market coverage Useful if you anticipate continued price volatility and want to diversify your range
Cons:
Ties up more of your capital in liquidity provision Increases overall exposure to market movements, which may not be ideal if SOL price falls sharply
Each approach comes with its own set of trade-offs, and the right decision ultimately depends on your market outlook, risk appetite, and goals as a liquidity provider. When evaluating your next move, consider key factors such as current market trends, Solana’s network fees, your tolerance for impermanent loss, and whether you prefer a passive or active management style. Thoughtful rebalancing can help you optimize performance while maintaining control over your capital.
Participating in liquidity provision—regardless of strategy—comes with inherent risks. These include, but are not limited to:
Impermanent Loss (IL) when asset prices diverge
Smart contract vulnerabilities
Systemic or platform-related failures
Market volatility and liquidity crunches
Regulatory shifts
Human or operational errors
There are no guarantees in DeFi, and you should only provide liquidity with capital you can afford to lose. If you're unsure, always seek advice from a qualified financial professional.
