# | DLMM Pools
The **DLMM (Dynamic Liquidity Market Maker)** protocol feature allows to concentrate liquidity into single ***"bins"***, which leads to more efficient and flexible liquidity provisioning and seamless trading experiences with zero slippage and low fees. With DLMM, liquidity providers can provide liquidity within a specified price range in any amount of their choice - this is called ***"Concentrated Liquidity"***. Using a $USDC-$USDT pool as an example: \ *If an liquidity provider chooses to provide liquidity between $0.99 and $1.01 then the LP will earn trading fees as long as the price is within that active trading range.* When someone makes a token swap or trade, a transaction fee will be charged. For all SectorOne DLMM pools 80% of that earned trading fees goes back to the liquidity providers and 20% of that earned trading fees go to the $ONE token stakers. All earned fee rewards are automatically compounded back into the active bin where trading happens. When a user withdraws his LP, he also collects all accumulated trading fee earnings together with his provided liquidity. More informations on the DLMM fee distribution & LP earnings in the chapter ["DLMM Earnings"](/tokenomics/dex-economics/dlmm-earnings.md). ### Bins in DLMM Pools
#### Bins To allow concentrated liquidity, the price curve is discretized into ***"bins"***, which is similar to the *"tick"-concept* in Uniswap V3. The main difference however, is that DLMM protocols use the ***"Constant Sum"-price formula*** instead of the *"Constant Product"-price formula*. #### Bin Steps What this means is that each bin represents a single price point and the difference between two consecutive bins is the ***"bin step" parameter***. Take for example the $USDC-$USDT pool again*\**: \ *If the current price is $1 and the bin step setting is 1 basis point (i.e. 0.0001 or 0.01%), then the next consecutive bins up are 1 x 1.0001=$1.0001, 1.0001 x 1.0001=$1.00020001 etc.*\ *\*Note that this is the geometric sequence.* In addition to using a different price calculation, bin steps are not restricted to one basis point. \ The *"bins step" pool setting* is a non-adjustable parameter, which can only be set-up by the initial pool creator. **Because of this, there can be multiple DLMM pools of the same token pair, that differ only in their bin step and/or the base fee pool settings.** Check out the next chapter ["Dynamic Fees"](/sectorone-dex/dlmm-pools/dynamic-fees.md) for more informations on the *base fee setup* and the additional *dynamic fee system* for DLMM pools. {% hint style="danger" %} **Impermanent Loss**\ Keep in mind that providing liquidity could be subject to **impermanent loss** and it **may carry certain risks**. Make sure you are aware of all the pros and cons of providing liquidity into a concentrated liquidity pool before taking any actions. You can learn more about impermanent loss by clicking [here](https://academy.binance.com/en/articles/impermanent-loss-explained). {% endhint %} --- # 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.sectorone.xyz/sectorone-dex/dlmm-pools.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.