No, liquidity providers are not liquidated if the pool's current price moves outside of their position's set price range.
The current price of a pool can move outside of the position's set price range due to swap activity.
These positions are out of range, single-sided, and do not earn fees until the current price of the pool moves into the set range. This is only possible with concentrated liquidity on Uniswap v3 and v4.
The ratio of tokens in a liquidity position fluctuates based on activity in the liquidity pool.
Here is an example:
- A liquidity provider has a price range of 1,000 ETH to 5,000 USDC for their pool.
- If ETH falls to 900, then the balance of the pool will be 100% in ETH.
- If ETH goes up to 6,000, then the balance will be 100% in USDC.