> ## Documentation Index
> Fetch the complete documentation index at: https://docs.prigeex.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Provide Liquidity: Classic vs Concentrated

**Providing liquidity** means depositing a pair of tokens (for example ETH and USDC) into
a pool so that other people can trade against it. In return, **you earn a share of the
trading fees** every time someone swaps using your pool.

PrigeeX offers **two ways** to do this: a simple mode (**Classic**) and an advanced mode
(**Concentrated**, sometimes shortened to **CL** for *concentrated liquidity*). This page helps
you pick. If you just want the fastest answer:

> **New to liquidity? Start with Classic.** It's simpler and needs no attention.
> **Want to earn more and don't mind managing it? Use Concentrated.**

## First, what is a liquidity provider?

A pool is a shared pot of two tokens. Traders swap against the pot, and each swap pays a
small fee. That fee is split among everyone who deposited into the pool, in proportion to
how much they put in. As a **liquidity provider (LP)**, you're essentially earning rent on
your tokens.

There's one trade-off to understand first, called **impermanent loss**; it applies to
both Classic and Concentrated. Please read [Impermanent Loss, Explained](../learn/impermanent-loss)
before depositing.

## The two modes side by side

|                       | **Classic** (simple)                            | **Concentrated** (advanced)                 |
| --------------------- | ----------------------------------------------- | ------------------------------------------- |
| **How it works**      | Your money spreads across *all* possible prices | You choose a **price range** to focus on    |
| **Effort**            | Set it and forget it                            | You may need to adjust your range over time |
| **Earning potential** | Steady, lower                                   | Can be much higher for the same money       |
| **What you receive**  | An **LP token** in your wallet                  | A **position (NFT)** you can see and manage |
| **Best for**          | Beginners, hands-off holders                    | Active users who want maximum fees          |

## How to think about it

**Classic spreads your tokens across every price**, from zero to infinity. It always works, it
never needs adjusting, and it earns a steady share of fees, but your money is thinly
spread, so you earn less per dollar deposited.

**Concentrated pools let you focus your tokens in a price range you choose**, say, "between $1,800
and $2,200 for ETH". Because your money is focused where trading actually happens, it does
much more work and earns far more fees for the same amount. The catch: if the price moves
**outside** your chosen range, your position stops earning until the price comes back or
you adjust your range. That's why Concentrated rewards a bit of attention.

<Note>
  **A simple analogy.** Classic is like renting out stalls along an entire highway; you'll
  always catch some traffic, but it's spread thin. Concentrated is like putting all your stalls at the
  one busy intersection: far more customers, but only while the traffic stays there.
</Note>

## Which should you choose?

* **Choose Classic** if you want to deposit and walk away, or you're providing liquidity for
  the first time.
* **Choose Concentrated** if you want to earn more, you understand that you might need to update your
  price range occasionally, and you're comfortable with the idea of a position going
  "out of range".

## Ready to add liquidity?

* [Add Liquidity (Classic) →](provide-liquidity-v2)
* [Add Liquidity (Concentrated) →](provide-liquidity-v3)

Already have positions? See [Manage Your Positions](manage-positions).