What happens
You supply both assets and select a range around the current price. Trades passing through the active liquidity generate LP fees. Price movement changes the assets held by the position.
Fees depend on trades that use the active liquidity. If price leaves the range, active fee earning reduces or stops until price returns.
Composition follows price.
Near one side of the range, the position holds more of one asset. Near the other side, it holds more of the other. Outside the range, it can hold almost entirely one asset.
BOUNDS does not quote an APR. A hypothetical fee calculation appears only when a user supplies an explicit trading-volume assumption, and it remains separate from real collected fees.
Technical details
The current canonical pool tick must sit strictly inside the selected bounds. V1 requires separate base- and quote-asset deposits; it does not swap one asset into the pair during creation.
Earn Fees accepts the Even distribution. Range-width presets change the bounds, not the distribution algorithm.