In the constant product model (x y = k), liquidity is provided across the price range from 0 to infinity. In contrast, concentrated liquidity adds depth to a market by providing capital in a limited price range, thereby improving capital efficiency.
There are several methods of concentrating liquidity, but Lifinity takes the simple yet unique approach of applying leverage to the value of k. This is achieved by simply multiplying k by the desired amount of concentration c, which determines the amount of liquidity provided:
xy=ck=Kx ⋅ y = c ⋅ k = K