> For the complete documentation index, see [llms.txt](https://docs.shadowdex.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.shadowdex.fi/concentrated-liquidity-core/concentrated-liquidity/concentrated-liquidity-advantage.md).

# Concentrated Liquidity Advantage

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)

<figure><img src="https://1557871036-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FEaw2C4RtPmJxSKgrOL5K%2Fuploads%2FbVErU0uib3bmVAyItDK4%2FCL%20Explained%20new%20(1).gif?alt=media&amp;token=7c0307d0-2e5b-44a9-9be9-cec5bb0ed2a1" alt=""><figcaption></figcaption></figure>

In a demonstration of concentrated liquidity’s efficiency on Shadow Exchange, consider Alice and Bob each looking to provide liquidity to an FTM/USDC pool with $1,000,000 at an FTM price of $0.45 USDC. Alice spreads her investment across the full price range, by depositing $1m in FTM/USDC. Bob, however, opts for a concentrated approach, allocating $183,500 within the 0.3–0.6$ range and keeping the remainder.

Despite Alice’s larger capital input, both earn equal fees if FTM/USDC stays within Bob’s chosen range. Moreover, if FTM were to go to zero, **Bob’s strategy limits his potential loss to $159,000 compared to Alice’s $1,000,000, giving him flexibility to reinvest or hedge with his remaining capital** — **while still earning the same rewards!**

This implementation is the most ideal on a chain like Fantom, slippage is real and exasperated with low liquidity and by concentrating liquidity, **Shadow Exchange will perform better with significantly less liquidity than your typical AMM.**