What is single-sided liquidity?

Single-sided liquidity refers to a position where you only provide one of the two tokens in a liquidity pool. For example, in the ICS/ICP trading pair, adding liquidity only for ICS or ICP is considered single-sided liquidity.

This feature is available on ICPSwap v3, allowing you to provide liquidity using just one token from the pair.

The liquidity pool will hold both tokens within the current price range, which is where all trades occur.

When providing liquidity on ICPSwap v3, you can select a specific price range. This can increase your capital efficiency and earn you more fees, though it also comes with greater risk. If the selected price range is outside the current market range, you’ll only be able to provide one of the tokens.

Here’s an example of what happens when the price range is above the current market price.

And here’s an example of what happens when the price range is below the current market price.