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

# Concentrated liquidity

> How Shield Swap allocates liquidity across price ranges.

Shield Swap assigns each LP position a lower tick and an upper tick. The position contributes active liquidity only while the pool's current tick is inside the half-open interval:

```text theme={"languages":{"custom":["/languages/leo.tmLanguage.json"]}}
tick_lower <= current_tick < tick_upper
```

An LP can concentrate capital near the current market price. Inventory composition and fee production change as price crosses the position boundaries.

## Position state

The public `Position` struct stores:

* Pool identifier
* Lower and upper ticks
* Liquidity amount
* Last fee-growth checkpoint for token0 and token1
* Token0 and token1 amounts owed

The `PositionNFT` ownership record proves who may operate that position. Public market state can show the range and liquidity for a `token_id` without storing the owner's address in the `positions` mapping.

## Boundary accounting

Each initialized boundary stores both `liquidity_gross` and signed `liquidity_net`.

* `liquidity_gross` is the total position liquidity that references the boundary.
* `liquidity_net` describes the change to active liquidity when price crosses the boundary upward.

A lower boundary adds liquidity on an upward crossing. An upper boundary removes it. For a downward crossing, the contract applies the opposite sign.

When `liquidity_gross` falls to zero, the contract removes the boundary from the initialized-tick list. This keeps the tick walk from stopping at an empty boundary.

## In-range and out-of-range inventory

The liquidity formulas produce different token requirements depending on the current square-root price:

* Below the range, the position is funded with token0.
* Inside the range, the position uses both tokens.
* Above the range, the position is funded with token1.

Mint and increase transfer the full native base-unit desired amounts into AMM custody, calculate the maximum supported liquidity, and then calculate the amounts actually used. The position receives `desired - used` as public `tokens_owed`; token change records contain only input-record value above the desired transfer.

## Fee eligibility

Only active liquidity receives fees for a swap step. The position's fee entitlement is derived from cumulative global fee growth and the fee-growth values stored outside its lower and upper ticks. Each step's fractional fee growth is recorded immediately using the liquidity active during that step.

## Contract-specific limits

Shield Swap combines tick ranges and Q128.128 per-liquidity fee growth with fixed unrolled tick walks, wide arithmetic, `PositionNFT` ownership records, public finalizer mappings, freezelist proofs, and a separate claim transaction. Quotes and range-management tools must reproduce these rules.