How Earn Works
A concentrated liquidity strategy for earning yield within a price range on Nest.
The Concept
Concentrated liquidity is the engine behind all strategies on Nest. With Earn, you're using it directly — no sell target, no buy target. You simply pick a price range where you think the asset will trade, deposit your tokens, and earn yield from trading fees and Nest emissions for as long as the price stays in your range.
Think of it as being a market maker. You're providing liquidity for traders to swap against, and in return, you earn a share of the trading fees plus additional rewards from Nest.
How It Works on Nest
1. You choose a price range
Set a lower bound and an upper bound around the current price. This is the range where your liquidity will be active and earning.
The key trade-off: a tighter range concentrates your liquidity more, earning higher fees per dollar — but it goes out of range faster if the price moves. A wider range stays active longer but earns less per dollar.
2. You deposit your tokens
You deposit a combination of the asset and a stablecoin (the exact ratio depends on where the current price sits within your range). Your deposit is deployed as liquidity in the pool immediately.
3. You earn yield continuously
Every time someone trades through the pool and the price is within your range, you earn a share of the trading fee. On top of that, Nest distributes emissions (rewards) to liquidity providers based on how concentrated and active their positions are.
The Three Scenarios
Price stays in range
You continuously earn yield. Your position shifts between more of the asset (when price drops within range) and more stablecoins (when price rises within range). This is normal CL behavior. The yield compensates for this rebalancing.
Price goes above your upper bound
Your position is fully converted to stablecoins. You've sold your asset at prices within your range. Out of range — no more yield until you rebalance or the price comes back down.
Price drops below your lower bound
Your position is fully in the asset token. You have unrealized loss. Out of range — no yield until the price recovers. You can withdraw your tokens at any time.
Understanding Impermanent Loss
Impermanent loss (IL) is the difference between holding your tokens versus providing them as liquidity. When the price moves, your position rebalances — selling the appreciating asset and buying the depreciating one. This can result in less total value compared to simply holding.
With concentrated liquidity, IL is amplified because your capital is more concentrated. However, the yield from fees and emissions is also amplified. The goal is for yield to exceed IL — which is more likely when:
- - The pool has high trading volume (more fees)
- - The price stays in range for extended periods
- - Nest emissions for the pool are strong
- - Your range is appropriately sized for the asset's volatility
Range Width Guide
Aggressive
±2-5%Goes out of range quickly. Requires active management.
Narrow
±5-10%Good balance for volatile assets with active monitoring.
Medium
±10-25%Suitable for most users. Less maintenance needed.
Wide
±25-50%Set and forget. Stays active through most market moves.
When Should You Use This?
- - You want to earn yield on your tokens without a specific sell or buy target
- - You're comfortable with the asset rebalancing between token and stablecoin
- - You understand impermanent loss and believe yield will exceed it
- - You want the flexibility to set your own range and manage it