Concept Explainer — Yodacom Research · LPIS Series · 2026-06-15

The Contingency Range

A pre-set secondary LP band outside the primary range — designed to earn on slow drift, not to protect against crashes. Proposed mechanism; not currently implemented in production.

Think of the contingency range as a backup lane: it catches gradual drift, but a sharp crash blows straight through it.
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What the contingency range adds to the position
Before (primary range only) vs. After (primary + contingency bands)
Price $160 $150 $130 $110 $100 BEFORE primary range only PRIMARY RANGE $110 – $150 RXI-gated LP active out-of-range → zero fees out-of-range → zero fees exits range → zero income AFTER primary + contingency ranges CONTINGENCY UPPER $150 – $160 RXI-gated, smaller capital PRIMARY RANGE $110 – $150 RXI-gated LP active CONTINGENCY LOWER $100 – $110 RXI-gated, smaller capital enters lower contingency fees continue add contingency

Three states the position can be in

State 1 — Normal (most of the time)
Price inside primary range. Primary LP is active, earning fees. Contingency ranges are deployed but idle — out-of-range, earning nothing. This is the intended state.
State 2 — Slow drift (contingency earns)
Price drifts slowly past the primary band. Primary LP exits its range and earns zero. The pre-deployed contingency range is already there — no action needed — and begins collecting fee income as price oscillates within it. Requires ongoing trading volume in the contingency band.
State 3 — Crash (contingency does NOT help)
Price gaps through the contingency band in a fast crash. No time to earn fees — price passes through too fast. The contingency range is not a hedge. It holds the token and keeps buying it as price falls. In a sharp crash, IL losses exceed fee income. Do not describe it as downside protection.
RXI gate condition
The contingency range is only deployed when the RXI signal confirms a ranging / mean-reverting regime below the primary band. If RXI detects a trending (directional) move, the contingency range should not be activated — that is the scenario where IL damage is highest and fee income is lowest.
The contingency range earns on slow oscillating drift — not on fast directional moves. The RXI gate is what distinguishes these two conditions.
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Matlock's honesty note — preserved as written
The conditions under which this mechanism does and does not work
What the contingency range actually does
The contingency range earns on slow drift, not crashes. For the mechanism to generate net-positive income, price needs to oscillate within the contingency band long enough to collect fees that exceed IL from holding the downward-drifting token. In a sharp, fast price crash, this condition is not met. The contingency range is a fee-generation extension on gradual displacement — it is not a risk-management tool, and calling it one would be inaccurate.
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Illustrative capital allocation
Not a recommendation — see disclaimer. Intended to show relative sizing logic.
Primary range — 80–90% of capital
Full RXI-gated LP in the primary band. This is where the simulation's core returns are generated. Upsizing this reduces flexibility but concentrates the earning band.
Each contingency range — 5–10% of capital
Small enough that IL in a crash does not overwhelm the primary position. Large enough to earn meaningful fee income on slow drift.
Keep each contingency band small. The risk is that a crash forces the contingency band to accumulate a falling token — the position size limits that damage.
Illustrative concept only — proposed mechanism, not currently implemented in production. The contingency range is an architectural proposal described in the LPIS research paper. It has not been validated by tick-level historical data and has not been implemented in the CoinRoc production platform. Price levels ($100, $110, $130, $150, $160) shown in the diagram are illustrative only and do not represent any specific asset or simulation output. The statement that contingency ranges earn fee income during slow drift is a directional inference, not a simulation-measured result. The mechanism does not protect against sharp price crashes and must not be described as a hedge, downside protection, or risk management tool. Capital allocation percentages (80–90% / 5–10%) are illustrative; actual allocation decisions depend on individual risk tolerance and capital size. Not investment advice. Consult qualified advisors before deploying capital.