> For the complete documentation index, see [llms.txt](https://arbidex.gitbook.io/arbitrum-exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://arbidex.gitbook.io/arbitrum-exchange/concentrated-liquidity/capital-efficiency.md).

# Capital Efficiency

The formula to determine the efficiency of a concentrated Quantum pool position in comparison to providing liquidity across the entire classic pool curve is as follows:

###                                                   ***Efficiency = 1/(1-(a/b)^(1/4))***

**Here, 'a' and 'b' represent the respective price bounds for the position.**

This equation enables a precise assessment of the relative efficiency between concentrated quantum positions and traditional classic liquidity provisions, thereby facilitating informed decision-making for liquidity providers within the whitepaper context.


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