What Is a "Non-Fungible Liquidity Position" and Why Is It Used in CLPs? ⎊ Path

What Is a “Non-Fungible Liquidity Position” and Why Is It Used in CLPs?

In concentrated liquidity pools, an LP's position is represented by a Non-Fungible Token (NFT). This is because each position is unique, defined by its specific, user-selected price range and the amount of capital deposited.

Unlike standard AMM tokens, which are fungible, the NFT accurately tracks the distinct parameters and accrued fees of the individual position.

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Glossar

Non-Fungible

Characteristic ⎊ Non-fungible describes an asset whose individual units are unique and cannot be mutually substituted, meaning each unit possesses distinct properties, history, and value.