After some encouragement, my friend’s explanation should help explain this concept.
When a liquidity pair is “out of range,” it means that the prices of the two assets in the pair have moved so much that your liquidity is no longer being used effectively in the market. Think of it like a vending machine designed to sell snacks between $1 and $2. If the price of snacks changes to $3, the machine can’t sell anything anymore—it’s “out of range.”
Rebalancing in this case means adjusting your assets (or liquidity) to get back “in range,” where the pair is active and earning fees. For example, if you’re providing liquidity for ETH and USDC, and the ETH price skyrockets, you might need to sell some ETH for USDC to adjust the ratio and ensure your liquidity pair is useful again within the new price range. This keeps your position functional and profitable.
