DeFi protocols often struggle with a fundamental design flaw: liquidity gets trapped in static ranges, leading to poor capital efficiency and reduced trading activity. Much of today's liquidity fragmentation stems from this rigid approach.

Adaptive liquidity models represent a different path forward. Rather than locking capital into predetermined positions, these systems respond dynamically to shifting market conditions in real time. When volatility spikes or trading patterns change, the liquidity adjusts accordingly—concentrating where it's needed most and avoiding dead capital zones.

The practical impact matters: traders encounter better execution, less slippage, and smoother price discovery. Meanwhile, liquidity providers get their capital working harder, earning better returns instead of sitting idle through irrelevant price ranges.

This shift from static to dynamic—from passive to responsive—addresses one of DeFi's most persistent efficiency problems. As market conditions evolve, liquidity infrastructure that can adapt becomes increasingly valuable.