# Liquidity Book DLMM Rewards

### **What is Concentrated Incentives?** <a href="#h_d4e0fa48ee" id="h_d4e0fa48ee"></a>

Concentrated Incentives (CI) is a reward mechanism that provides real-time rewards, using a fully onchain solution for Liquidity Providers in Liquidity Book Pools. The design of CI encourages Liquidity\
Providers to keep their liquidity, actively managed. CI is different from the existing Liquidity Book Rewards Program, as all Liquidity Providers can earn rewards instantly, as opposed to receiving a\
retroactive distribution following an offchain calculation. CI is therefore, a familiar 'v1' yield farming style of incentive design, but built for v2 (Concentrated Liquidity).

### **How does it work?** <a href="#h_54e6cd0d16" id="h_54e6cd0d16"></a>

Concentrated Incentives offers targeted rewards to liquidity providers, streamed in real-time to liquidity actively provided within the 'Reward Range'. This reward range is a fixed radius around the active bin and is specific to each Liquidity Book Pool. The reward range can vary from 1 bin to a maximum of 11 bins. Rewards are distributed proportionally based on the amount of liquidity provided. For instance, if one bin holds twice as much liquidity as the others within the reward range, it will receive twice as many rewards.

**Example:**

* If you hold 50% of the liquidity in the reward range, you'll earn 50% of the rewards
* If you hold 20% of the liquidity in the reward range, you'll earn 20% of the rewards

As the active bin moves with market fluctuations, the reward range adjusts in real-time according to price changes. Essentially, the reward range moves up and down with the active bin. This incentivization\
mechanism enhances liquidity depth at current market prices, as liquidity providers are directly incentivized to keep liquidity in the reward range.

<figure><img src="/files/MDiBGdd2f9pSetbnM8De" alt=""><figcaption></figcaption></figure>

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## Concentrated Incentives Features: <a href="#h_1fd39bf6f1" id="h_1fd39bf6f1"></a>

* **Enhanced Liquidity Depth:** By incentivizing Liquidity Providers to provide liquidity at and around current market prices, this helps to improve swap efficiency for Traders.&#x20;
* **Adaptive Incentives:** Rewards move in real-time with the price in the Liquidity Pool, this helps to encourage optimal liquidity distribution as and when the price moves.
* **Pool-Specific Flexibility:** Every Liquidity Book Pool can have a tailored reward range, ensuring the right conditions can be fostered for optimal liquidity distribution.
* **Real-Time Rewards:** Liquidity Providers can instantly earn rewards, without any delay unlike other existing incentive mechanisms on concentrated liquidity protocols.

***

### Step by step guide to get up and running <a href="#h_7d0e4b8eeb" id="h_7d0e4b8eeb"></a>

* **Search:** On the Pools page, search for a LB Liquidity Pool you wish to supply liquidity for with a 'Rewards' tag.
* **View Information:** The Pool Page will provide information about the Reward range. The quantity of bins in the reward range is also viewable, along with information on current reward amounts, total\
  liquidity in range, and estimated reward APR.&#x20;
* **Deploy Liquidity:** This can be within the reward range or in a range that covers the reward range as well. Your deployment strategy will determine your level of expectation around management of that\
  liquidity.&#x20;
* **Earn rewards:** Any liquidity you have deposited within the reward range will immediately begin accruing rewards. The rewarded bin range will also be viewable on the 'My Liquidity' section once you have deployed liquidity, so you can easily see what portion of your liquidity is earning rewards.


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