> For the complete documentation index, see [llms.txt](https://bound-1.gitbook.io/bound-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://bound-1.gitbook.io/bound-docs/provide-liquidity/how-it-works.md).

# How It Works

Bound's Runes AMM uses **Concentrated Liquidity** - LPs deposit assets into pools and set a custom price range over which their liquidity is active.

## The basics

1. Choose a pool (e.g. PUPS/BTC) from the **Pools** tab
2. Set your price range - the range over which your liquidity will be active
3. Enter your asset amounts - required amounts are based on the current AMM quote price
4. Confirm and sign a PSBT from your Trading Wallet
5. Your position appears immediately in the **Positions** tab

## How you earn

As trading occurs within your designated price range, you earn a share of the trading fees generated. Fees accrue in real time and are claimable at any time from the **Portfolio** tab.

## Fee tiers

When providing liquidity, you choose the pool's fee tier (0.05%, 0.30%, 0.50%, or 1.00%). Higher fee tiers compensate for higher volatility and lower liquidity depth.

{% hint style="info" %}
**2/3 of all trading fees go to Liquidity Providers.** The remaining 1/3 goes to Bound protocol.
{% endhint %}