How Does Concentrated Liquidity Differ from Traditional AMM Pools for a DAO’s Treasury?

Traditional AMM pools distribute liquidity uniformly across the entire price range from zero to infinity. Concentrated liquidity (e.g.

Uniswap V3) allows a DAO to allocate its capital to specific, narrow price ranges. This significantly increases capital efficiency and fee generation within the active range, as the treasury's funds are focused where most trading occurs.

However, it requires active management and increases the risk of the position moving out of range, earning no fees and incurring greater impermanent loss.