Tick spacing is a parameter in concentrated liquidity pools that determines the granularity of available price bins. A smaller tick spacing allows liquidity to be placed more precisely around current prices, but increases the computational cost of operations.

Each liquidity pool has a fixed tick spacing set at creation. Pools with smaller tick spacing (more granular) are better suited for stable pairs where the price stays in a narrow range. Larger tick spacings suit volatile pairs where price moves widely.

Tick spacing interacts with fee tier — on most DEXs, lower fee tiers use smaller tick spacing (for stable pairs) and higher fee tiers use larger tick spacing (for volatile pairs), creating a consistent relationship between fee income and position management requirements.