> ## Documentation Index
> Fetch the complete documentation index at: https://docs.lunya.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidity Vaults

> Automated management of concentrated liquidity positions

## Why vaults exist

Concentrated liquidity earns more per unit of capital — but only while the position is in range, and keeping it there is active work. Vaults close that gap: deposit assets, and the vault manages the concentrated position for you — choosing ranges, re-positioning as the market moves, compounding.

Vaults live **outside the pool**, as their own contracts: pools stay minimal and trustless, while active management strategy — which requires discretion — is layered on top where it can be chosen, audited, and priced separately.

## How they work

<Steps>
  <Step title="Deposit">
    Deposit the pair's assets into the vault and receive vault shares representing your part of the managed position.
  </Step>

  <Step title="The vault manages">
    The vault holds the underlying concentrated position and adjusts its range as the market moves, keeping the capital productive.
  </Step>

  <Step title="Withdraw">
    Redeem shares for your part of the underlying assets plus accrued fees, minus the vault's management fee.
  </Step>
</Steps>

## Trade-offs

* **Passive exposure to CL yields** — no range monitoring, no manual re-ranging
* **A management fee** — a share of earnings goes to the vault's fee recipient
* **Strategy risk on top of LP risk** — impermanent loss still applies, and the vault's re-ranging decisions add their own performance variable

<Note>
  For hands-on LPs who want full control of their ranges, direct positions remain first-class — see [Pools & Fees](/exchange/pools-and-fees#providing-liquidity-in-practice).
</Note>