> For the complete documentation index, see [llms.txt](https://docs.tren.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tren.finance/get-started/what-is-tren-finance/concentrated-liquidity-positions.md).

# 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/#:~:text=Hedging%20is%20a%20risk%20management,provides%2C%20known%20as%20the%20premium) 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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