LIQUIDITY PRACTICE / 6 MIN READ

Choosing a liquidity distribution

A uniform allocation spreads liquidity across the selected range. A center-weighted allocation places more near the current price. An edge-weighted allocation emphasizes the ends. Each shape is a statement about where you expect trades and how actively you will manage exposure.

No distribution dominates in every market. More liquidity near the current price can capture a larger share of nearby fees, but it can leave the active range sooner. Start with the exposure you can monitor, not the largest historical rate shown in a table.