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Ticks, tick spacing, and fee tiers are core concepts in Orca’s concentrated liquidity pools, also known as CLMM pools. They affect how price ranges are divided, where liquidity can be placed, and what fees apply to swaps through a pool. This guide explains how each concept works and how they relate to liquidity positions on Orca.
This guide is informational only and does not provide financial advice. Liquidity position outcomes depend on price movement, trading activity, liquidity, fees, rewards, slippage, transaction costs, and market conditions.

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What are ticks?

Ticks are discrete price intervals within a pool. In concentrated liquidity pools, liquidity providers select a price range for their position. That range is made up of ticks. The selected lower and upper ticks determine where liquidity is active. For example, in a SOL/USDC pool, a liquidity provider may choose a price range around the current pool price. The position can accrue swap fees only while the pool price is within the selected range and swaps use the position’s liquidity. Ticks make it possible to define specific price ranges for liquidity positions.

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What is tick spacing?

Tick spacing describes the interval between usable ticks in a pool. Narrower tick spacing allows price ranges to be set with more granularity. Wider tick spacing means usable ticks are farther apart, so positions are set across larger price increments. Tick spacing is determined by the pool’s fee tier. Different fee tiers can have different tick spacing. Narrower spacing may be more relevant for pairs with lower relative price movement. Wider spacing may be more relevant for pairs with higher relative price movement. These are general mechanics, not a guarantee of position outcome.

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What are fee tiers?

Fee tiers describe the swap fee applied when traders swap through a pool. On Orca, fee tiers can range from 0.01% to 2%, depending on the pool type and configuration. Each fee tier for a token pair operates as a separate pool. Swap fees may accrue to liquidity providers whose liquidity is active and used by swaps. Fee accrual depends on trading activity, active liquidity, position range, and pool conditions. Fee tiers can affect trader costs, liquidity distribution, and LP fee accrual. They do not guarantee trading volume, fee income, or LP returns.

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Adaptive Fee Pools

Adaptive Fee Pools are Orca pools where the trading fee can include both a base fee and an adaptive component. In fixed-fee pools, swaps use the pool’s fixed fee tier. In Adaptive Fee Pools, the selected fee tier acts as the base fee, while the effective fee may increase when price movement or volatility conditions increase. This means the effective fee rate can change over time. For a deeper explanation, see Adaptive Fee Pools.
Adaptive fees may affect fees paid by traders and fees accrued by liquidity providers. They do not guarantee higher LP returns or lower risk.

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How ticks, tick spacing, and fee tiers relate

On Orca, tick spacing varies by fee tier. These settings affect how liquidity positions are created and how swaps interact with liquidity.

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Practical effects

  • Narrower tick spacing allows more granular range selection.
  • Wider tick spacing means positions use broader price increments.
  • Each fee tier operates as a separate pool for the same token pair.
  • Liquidity, price impact, and route availability can differ across fee tiers.
  • Fee and reward accrual depend on active liquidity, trading activity, reward configuration, and market conditions.

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Important considerations

  • Providing liquidity involves price risk, including impermanent loss or divergence loss.
  • Positions only accrue swap fees while liquidity is in range and used by swaps.
  • Fee tiers do not guarantee fee income, trading activity, or LP returns.
  • Higher fee tiers may affect routing and trader costs.
  • Adaptive Fee Pools can have changing effective fee rates.
  • Rewards, where available, depend on reward configuration and eligible liquidity.
  • Slippage, transaction costs, priority fees, and market movement can affect final outcomes.

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Example

A token pair may have multiple pools with different fee tiers: Each pool has separate liquidity, fee accrual, and routing conditions. Actual outcomes depend on pool activity and market conditions.