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Roughly 85% of concentrated liquidity across the protocols Dune analyzed was sitting outside its fee-earning range at any given moment, leaving an estimated $542 million fully dormant in an average week. That idle capital translates into about $150 million a year in unrealized fees for liquidity providers, according to Dune research.
Why it matters
Concentrated-liquidity positions are designed to earn more per dollar deployed than passive LP, but only when the position stays in range. The Dune data shows the mechanic breaks down at scale: more than a third of the idle capital has sat untouched for over 90 days, meaning LPs are not just missing trades, they have effectively abandoned the positions. The dollar figure dwarfs the typical yield uplift a passive LP would earn elsewhere, suggesting the active management tax is heavier than the headline APY suggests.
Market impact
The finding reframes the cost-benefit math on every major concentrated-liquidity venue. For LPs, it validates automated rebalancing strategies and vault products that abstract the active-management problem. For protocols, it puts the spotlight on default-range UX and on how much of the TVL advertised on dashboards is actually earning fees at any moment.
Frequently asked questions
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What did Dune find about concentrated-liquidity utilization?
Roughly 85% of concentrated liquidity across the protocols Dune analyzed was sitting outside its fee-earning range at any given moment, with about $542M fully dormant in an average week.
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How much in fees are LPs losing each year?
Dune estimated liquidity providers give up around $150 million annually in unrealized fees because their positions fall out of range, with more than a third of the idle capital untouched for over 90 days.
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Which DeFi protocols does the Dune data cover?
Dune analyzed concentrated-liquidity positions across multiple protocols but did not single out a specific venue in the headline figures, framing the finding as a sector-wide utilization problem.
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What is concentrated liquidity and why does being out of range matter?
Concentrated liquidity lets LPs deploy capital within a chosen price range to amplify fee earnings versus passive LP. When the market moves outside that range, the position stops earning fees entirely.
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What can LPs do to avoid losing fees to out-of-range positions?
Active rebalancing, automated LP vaults, and wider default ranges are the main mitigations; the Dune data argues the default-range UX of most venues makes manual management untenable at scale.
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