# Fluid Liquidity ## Overview An adaptable approach for varied market conditions. Liquidity positions adjust based on the vault’s asset ratio, operating in three states (default, unbalanced, one‑sided). The aim is to preserve desired holdings while maintaining active fee capture and mitigating divergence loss. ## Ideal Applications This strategy also performs well in environments with low liquidity, markets where the vault holds the majority of funds, and is flexible in new chains and markets during maturity. ## Technical Explanation Positions adapt to the vault’s asset ratio: a default near‑price position, limit positions to rebalance holdings, and a wide sprawl when one‑sided. Parameterization is minimal from an investor perspective; the system prioritizes capital preservation and active fee capture --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.yfarmer.xyz/alm/modules/fluid-liquidity.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.