What Happens When an LP Position Goes Out of Range?

What "out of range" means

A concentrated-liquidity position has a Lower price and an Upper price. Together, these boundaries define the interval where the position can provide active liquidity.

The current pool price can be below the selected range, inside the selected range, or above the selected range. When the current price is outside that interval, the position's liquidity is inactive.

Below, inside, and above

SmoothLP can compare different selected ranges against the same frozen pool snapshot. In this example, the observed WETH/USDG snapshot price was approximately 2,436.07 USDG per WETH.

These are three different ranges evaluated against the same frozen snapshot. They do not show the market moving over time.

For the below-range example, the selected range sits above the snapshot price, so the position requires WETH only. For the inside-range example, the snapshot price is between the Lower and Upper boundaries, so both WETH and USDG are required. For the above-range example, the selected range sits below the snapshot price, so the position requires USDG only.

These token names are specific to this WETH/USDG example. Which token remains depends on the pair and how its price is displayed.

What happens to the two tokens?

As the pool price moves through a concentrated-liquidity range, the position's mix of the two tokens changes. When price is inside the range, both tokens can be present in the liquidity principal. When price moves beyond one side of the range, the liquidity principal becomes one-sided.

This does not mean the protocol discarded one of the tokens. The pool mechanics changed the position's token composition as swaps moved the pool price through the range.

Inverting the displayed pair changes how prices and labels are presented. It does not create a different underlying pool position.

Does an out-of-range LP earn fees?

The position does not earn new swap fees from its inactive liquidity while it is out of range.

A position may still have fees that were earned earlier while it was active. Those previously accrued fees are separate from whether the position is currently earning new fees. Being out of range does not erase accrued fees, but inactive liquidity does not earn new swap fees.

Was my position liquidated or closed?

No.

Ordinary Uniswap V3 out-of-range behavior is not liquidation. The position and its selected boundaries still exist. Its liquidity is simply inactive at the current pool price, and the protocol does not automatically close it merely because the current price leaves its range.

Can price come back into the range?

Yes. If the pool price later returns inside the position's existing Lower and Upper boundaries, the liquidity can become active again. Its token composition will begin changing again as swaps move the price through the range.

Re-entry makes the liquidity available to swaps. It does not guarantee trading activity or fee earnings.

Can I withdraw while out of range?

Yes. Being out of range does not prevent liquidity removal. A liquidity provider who controls the position can decrease or remove its liquidity through the relevant Uniswap position-management process.

This article does not provide transaction instructions, and SmoothLP is currently a read-only planning tool.

Is being out of range the same as impermanent loss?

No.

Out of range describes the current state of the position's liquidity. It does not by itself tell you whether the LP gained or lost value compared with holding the tokens.

Do I need to change my range?

That is a strategy decision. SmoothLP does not recommend whether you should wait, withdraw, widen, narrow, or reposition a range.

An existing Uniswap V3 position's boundaries are not edited in place. Using a different Lower or Upper boundary requires removing liquidity and creating a position with a different range.

To understand the boundaries themselves, see how to choose and compare concentrated-liquidity ranges.

See it in SmoothLP

SmoothLP lets you inspect an observed liquidity profile, move the Lower and Upper boundaries, and see whether the frozen snapshot price is below, inside, or above the selected range. It also shows which tokens the planned position would require at that captured pool state.

Canonical article: https://smoothlp.com/learn/what-happens-when-lp-is-out-of-range