Guide

Automated liquidity provision

By Surfista Crypto · Reviewed by Evan Luthra · Updated

Automated liquidity management is software that manages a liquidity position for you, rebalancing a concentrated price range as the market moves so the position keeps earning fees without manual work.

The active-management problem

Providing liquidity used to mean spreading capital across the whole price curve. Concentrated liquidity changed that: you commit capital to a chosen price range and earn far more fees on the same amount, as long as the price stays inside that range. The catch is that markets move. When the price leaves your range, the position goes dormant and stops earning until you move it. Rebalancing by hand is constant attention, and every adjustment costs gas.

What automation actually does

Automated liquidity management watches the position and rebalances the range as the market moves, so your capital keeps working without you adjusting it manually. The goal is to capture more of the trading fees a concentrated position can earn while removing the hands-on burden. It is the automation of a real, tedious job, not a promise of returns.

Self-custodial and on-chain

Automation does not have to mean handing over your coins. On Pool Party, your funds stay in your own wallet until they enter a strategy contract, and every allocation and fee is visible on-chain. You keep self-custody while the strategy manages the position on Base.

How Pool Party does it

Pool Party automates concentrated-liquidity management on Base, routing liquidity to venues like Aerodrome inside strategy contracts. Strategy creators can earn a performance fee, and because everything is on-chain, the track record is verifiable rather than claimed. Launch the app.

Learn the building blocks

Frequently asked questions

What is automated liquidity management?
Automated liquidity management is software that manages a liquidity position for you, rebalancing a concentrated price range as the market moves so the position keeps earning fees without manual adjustment. On Pool Party it runs self-custodially on Base, inside strategy contracts.
Why does liquidity provision need automation?
Concentrated liquidity earns more fees on the same capital, but only while the price stays in your chosen range. When it moves out, the position stops earning and needs rebalancing. Doing that by hand is constant work and costs gas on every adjustment, which is what automation removes.
Is automated liquidity provision self-custodial?
On Pool Party it is. Your funds stay in your own wallet until you deposit them into a strategy contract, and every allocation and fee is visible on-chain. Automation manages the position; it does not take custody of your assets.
Does automation remove the risk of impermanent loss?
No. Automation manages the range to keep earning fees, but impermanent loss is inherent to providing liquidity and is not eliminated. The net result is still fees and rewards minus impermanent loss, and nothing here is guaranteed.