# Liquidity Mining As liquidity is non-fungible across position in CLMM, distributing mining incentives purely based on TVL just like traditional AMM does is not a reasonable solution. Therefore, Cetus CLMM introduces the fee-based liquidity mining model natively. ### Fee-Based Liquidity Mining In a concentrated liquidity protocol, only positions whose price ranges currently encompass the pool price are active and able to earn transaction fees. Cetus CLMM’s fee-based liquidity mining model distributes rewards based on the actual fee contribution of each position, reflecting its real-time effectiveness and utilization. This ensures that LPs are rewarded proportionally for the liquidity they actively provide to the pool, rather than simply the amount of capital deposited. Every time a new transaction occurs, the contract calculates each active position’s share of fees relative to the total fees generated since the last distribution. Mining rewards are then released proportionally, giving more incentives to positions that are actively contributing liquidity at the relevant price ranges. This approach prevents inactive positions or strategically misaligned liquidity from diluting rewards. By tying incentives directly to real-time active liquidity, Cetus CLMM not only encourages LPs to concentrate capital where it’s most effective but also significantly improves the overall efficiency of the protocol’s TVL compared with traditional AMM liquidity mining models. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://cetus-1.gitbook.io/cetus-docs/clmm/liquidity-mining.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.