What Is the Main Benefit of Capital Efficiency Achieved by Concentrated Liquidity?

Capital efficiency means that the liquidity is concentrated in the most frequently traded price range, rather than spread across the entire 0 to infinity range. This results in a much deeper virtual pool within the active range.

Consequently, traders experience significantly lower slippage, and LPs earn much higher fees with the same amount of capital, as their funds are actively used for a higher percentage of the time.