> For the complete documentation index, see [llms.txt](https://docs.datadex.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.datadex.com/step-by-step-guide-to-providing-liquidity/step-5-define-the-price-range.md).

# Step 5 -  Define the Price Range

DataDex introduces Concentrated Liquidity, allowing you to specify a price range in which your liquidity will be active.

* Lower Bound: The minimum price at which your liquidity will be active.
* Upper Bound: The maximum price at which your liquidity will be active.

### Key Considerations for Choosing a Price Range:

Wide Range:

* Covers more market activity.
* Generates fewer fees but reduces the risk of your position becoming inactive.
* Suitable for less experienced LPs.

Narrow Range:

* Higher capital efficiency and potential for greater fees.
* Increased risk of impermanent loss if the price moves outside your range.
* Requires active management.

Tip: DLP projects should opt for Full Range Liquidity initially and allow market makers to take the concentrated positions. 

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