The solid line is the average price of each half hour in this pool, read from its own oracle. The dashed lines are the bounds of your range: while the price is between them, you are collecting.

A liquidity position does not hold dollars: it holds a mix of the two assets that the pool keeps changing on its own. When ETH rises, it sells your WETH and leaves you USDC; when it falls, it buys it back. That is why your capital moves even when you touch nothing.

What is happening with your money

Your capital sits in a narrow range around the price of ETH. While the price stays inside, you collect a share of the fee on every swap that goes through the pool. The narrower the range, the more you collect — and the more often it has to be moved.

When the price leaves, an automated keeper closes the position and opens another one next to the new price. It converts nothing while doing so: it places the whole range on the side where you already hold the asset. That saves the swap fee and the risk of being front-run, and across 749,143 real swaps it was worth twenty-three points.

The gas for those moves comes out of the fees the position itself has generated, never out of your pocket or your capital. If a position does not earn enough to pay for its own maintenance, it stops moving instead of bleeding out.