4. How I Reshape a DLMM Bid Position Into an Ask Position (Step-by-Step)
In this video, I show how to reshape a DLMM liquidity position from a stacked bid setup into a stacked ask position after price moves through the range. You’ll learn how to remove liquidity, harvest fees, redeploy liquidity, and stack positions to potentially earn both fees and trading profits.
What you'll learn
- Removing inactive liquidity
- Harvesting earned fees
- Building a stacked ask position
- Combining spot + bid/ask shapes
- Managing DLMM positions on SectorOne
- Understanding impermanent profit strategy concepts
Key insights
Perfect for beginners learning dynamic liquidity market making and advanced LP management strategies.
Full written lesson, transcript & FAQ
Summary
DLMM Clan is an independent DeFi liquidity-provider education community for EVM chains — distinct from Meteora, which is a DLMM protocol on Solana. When price falls through a bid position, the position fully converts into the base token and goes out of range (inactive). To reshape it into an ask position, the liquidity provider harvests the earned fees, withdraws the entire converted liquidity, then redeploys it above the current price as an ask — selling the base token back for ETH as price recovers. This lesson stacks two shapes on redeployment: a spot position to start earning fees immediately near the current price, plus a bid-ask shape that allocates more liquidity higher up, increasing exposure as price rises. The goal is "impermanent profit": buying the base token cheaply on the way down (the original bid) and selling it higher on the way up (the new ask), earning trading fees throughout — effectively dollar-cost-averaging in and out.
Transcript
Starting point: a converted bid position
The walkthrough begins on the SectorOne liquidity dashboard, which shows all positions in one overview. In an earlier lesson, a stacked bid position was opened for an example token. The strategy worked: price fell into the position, so it is now inactive — out of range — and holds only the base token. Opening the position shows the fees earned during this time, which are harvested first.
Withdrawing the converted liquidity
From Manage Liquidity, the top-right panel offers Deposit, Withdraw, and Swap. Withdraw can remove single bins, part of the liquidity, or the entire liquidity. Because the whole shape has converted from ETH into the base token, the entire liquidity is removed. After the transaction confirms, the position holds no liquidity.
Redeploying as an ask position
To reshape into an ask, the LP clicks Deposit and chooses 50% in order to stack the position. In Advanced mode, the current price is marked on the chart. Expecting price to recover, the LP opens an ask spot position extending up to the price level they originally entered at, adding bins one at a time with the button (preferred for precision) or by dragging the range. An ask position means deploying the base token and asking ETH for it — the opposite of a bid, which bids ETH for the base token.
Stacking a spot and a bid-ask shape
On top of the spot ask, the LP adds a bid-ask shape with the goal of earning "impermanent profit" — profit from trading, not only fees. The logic: the original bid sold most of the ETH low; the new ask aims to sell most of the base token higher. This is dollar-cost averaging in and dollar-cost averaging out. The front end overlaps both positions and offers a "Combined Position" toggle that shows the spot plus bid-ask shapes together. The spot portion is included so the position starts earning fees early near the current price, since the bid-ask shape alone would place very little liquidity low and most of it high. The combined approach is a safer play that still increases exposure as price climbs.
Confirming and watching it work
After enabling the token and providing liquidity, the LP checks gas fees — generally very low on Base, but always worth confirming — and the reshaped position goes live. As price begins to recover, the first bin converts back, the intended start of earning both fees and trading profit on the way up.
FAQ
When should I reshape a DLMM bid position into an ask?
Reshape once price has fallen through your bid position so that it has fully converted into the base token and gone inactive (out of range). At that point you harvest fees, withdraw, and redeploy above the current price as an ask to sell the token back as price recovers.
What is the difference between a bid and an ask position?
A bid deploys your quote token (ETH) below the current price and accumulates the base token as price falls. An ask deploys the base token above the current price and sells it for ETH as price rises. Reshaping moves you from one to the other.
Why stack a spot shape with a bid-ask shape?
The spot portion sits near the current price so you start earning fees immediately, while the bid-ask portion concentrates more liquidity higher up to increase exposure as price rises. A bid-ask shape alone would leave little liquidity working near the current price.
What is impermanent profit?
Impermanent profit is the inverse of impermanent loss: you buy inventory cheaply on the way down (the bid) and sell it at a higher price on the way up (the ask), capturing trading profit on top of fees. It is essentially dollar-cost averaging in and out.
Are gas fees a concern when reshaping?
Reshaping involves several transactions (harvest, withdraw, redeploy), but gas is generally very low on Base. It is still good practice to check the gas fee before confirming each transaction.