Figure 3 — Yodacom Research · LPIS Series · 2026-06-15
The Income-vs-IL Tension: What You Earn and What You Lose
Annual LP capital decomposition · Gross fee income vs. IL drag vs. gas drag vs. net return · B-tier sweet spot (left) vs. A-tier majors (right) · RXI-gated, Arbitrum
Annual return components as % of LP capital deployed (RXI-gated ranging periods)
+40% +30% +20% +10% 0% −10% −20% B-TIER — LP SWEET SPOT (simulation; proxy range not point estimate) +28–35% [simulation range] Gross Fees −12–18% [simulation range] IL Drag −0.3% Gas Net range upper ~+17% Net midpoint ~+13% Net range lower ~+10% Income-to-IL Ratio 1.6x – 2.4x A-TIER — MAJORS (ETH, BTC, SOL) (measured from simulation) +20.2% Gross Fees −12.4% IL Drag −0.5% Gas Net +7.3% on LP capital = +4.9% on total capital (3-3-3) Income-to-IL Ratio 1.63x HODL +10.9% (total cap)
B-tier key takeaway
In ranging regimes (RXI-gated deployment): for every dollar of IL you absorb, fee income returns 1.6–2.4 dollars. Net income is real but not a windfall — fees and IL are in partial tension, not canceling out.
A-tier key takeaway
A-tier (ETH, BTC, SOL) sit in the 0.05% fee tier — 6x lower gross fee income than B-tier. The IL drag is similar, so net on LP capital is only +7.3%. The 50/50 HODL alternative returns +10.9% with no management burden.
Simulation disclosure: B-tier values are stated as simulation ranges, not point estimates (gross fee +28–35%; IL −12–18%; net ~+10–17% on LP capital). A-tier values are simulation point estimates with 95% CI per RES-LPIS-EMPIRICAL-01 Table 3.2 (+7.3% net on LP capital). Capital model: 3-3-3 (2/3 LP deployed, 1/3 USDC). RXI-gated — deployed only in ranging regimes. Income-to-IL ratio measured during ranging deployment weeks only; overall annualized net accounts for weeks sat out. Tick-level historical data validation required before any investor-facing net APY point estimate (Priority 1, RES-LPIS-EMPIRICAL-01). Not a projection of future returns.