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Concentration

Helm concentrates liquidity around oracle price without using tick ranges. Instead of spreading capital across a constant-product curve, the pool quotes from oracle pricing and uses an inventory curve to shape how aggressively it offers liquidity.

What Concentrated Means Here​

In a traditional AMM, price moves because reserves move. Liquidity is distributed across a curve, and traders push the pool price as they trade.

In Helm:

  • The quote price comes from oracle and HyperCore market data.
  • The pool's reserves do not define the price.
  • Liquidity can be offered close to the oracle price when post-trade inventory skew is small.
  • Fees increase as post-trade inventory skew moves away from zero.

This creates concentrated liquidity without asking LPs to choose a price range.

Inventory Skew Curve​

The pool calculates a post-trade inventory skew score:

  1. Read the current hedge position.
  2. Compute the target hedge position from pool value and Core allocation.
  3. Simulate the hedge position after the trade.
  4. Convert the distance from target into a bounded inventory skew from -100 to 100.
  5. Apply a fee from that post-trade inventory skew.

When post-trade inventory skew is close to zero, the fee component is small. As absolute skew moves toward the edge of the allowed range, the fee rises sharply.

Convex Fee Shape​

The inventory-fee curve is convex: small inventory-skew deviations are cheap, but large deviations become expensive quickly.

Conceptual inventory concentration curve

inventory feeBps ~ abs(inventory skew)^4

This fourth-power shape is the concentration curve. It lets the pool quote tightly near zero inventory skew while making high-skew trades progressively more expensive. The final swap fee can also include other components and caps, so the chart is a simplified view of the inventory-skew component.

Rebalancing Fee Discount​

The curve is directional from the trader's point of view:

  • Trades that move inventory closer to the target can receive better pricing.
  • Trades that move inventory farther from the target pay more.
  • The same trade size can quote differently depending on the pool's current inventory state.

This gives the pool a self-correcting quote surface. Flow that helps restore inventory gets more attractive pricing, while flow that consumes scarce inventory becomes more expensive.

Why This Matters​

For traders, concentration means tighter quotes when post-trade inventory skew remains close to zero.

For LPs, concentration means capital is not passively spread across unused price ranges. The pool can offer deep liquidity near oracle price while the fee curve protects LPs as inventory skew increases.

Next Steps​