# Concentrated Liquidity Positions

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**Step 1:** The user creates a concentrated liquidity position in UniswapV3 for ETH-USDT within a selected price range to maximize capital efficiency, receiving an LP NFT to represent their position.

**Step 2:** The user deposits their concentrated LP NFT as collateral in Tren Finance to borrow XY while maintaining liquidity provision rewards.

**Step 3:** Maintain liquidity rewards while reducing impermanent loss exposure through [hedging](https://www.investopedia.com/trading/hedging-beginners-guide/) with the following benefits:

* Reduced IL exposure while maintaining full LP rewards&#x20;
* Capital efficient liquidity provision in target range&#x20;
* Automated position management through hooks

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