The example assumes $USDC stays at $1, uses Uniswap v3’s reserve equations and ignores tick rounding. Liquidity stays unchanged. Fees are separate, uncollected and not reinvested; their dollar values below are illustrative assumptions, not calculated from the price points or a yield forecast. The table excludes transaction costs.
| Stage / $ETH price | Principal tokens | Active? | Claimable fees, valued in dollars | LP total, including fees | Unchanged holdings | | — | — | — | — | — | — | | Initially inside / $2,500 | 0.4 $ETH + 1,200 $USDC | Yes | $0 | $2,200 | $2,200 | | Above / $4,900 | 0 $ETH + 2,400 $USDC | No | $20 | $2,420 | $3,160 | | Below / $900 | 1 $ETH + 0 $USDC | No | $30 | $930 | $1,560 | | Reentered, back at $2,500 | 0.4 $ETH + 1,200 $USDC | Yes | $40 | $2,240 | $2,200 |
*The Defiant’s hypothetical calculation. Fees mean the LP’s earnings after any protocol allocation. Actual fees can accrue in either token, so their dollar value can also change with $ETH’s price.*
Above the upper boundary, the principal stays at 2,400 $USDC even if $ETH rises further. At $4,900, the assumed $20 of fees reduces a $760 principal shortfall against holding to **$740**. Below the lower boundary, the principal is entirely $ETH, so its dollar value can keep falling. Inactivity is not price protection.
Previously earned fees remain claimable outside the range, but no new swap fees accrue while the position is inactive. Fees can accumulate during the in-range trading between the illustrated snapshots.
Reentry restores activity, not necessarily the original token mix or value relative to holding. In this example, returning all the way to the original $2,500 price restores the original principal balances; the assumed $40 of fees then puts the LP ahead before expenses. Merely crossing back over a boundary does not do that. The Defiant’s full-range liquidity guide explains the same distinction between fee income and holding underperformance without a finite price band.
Reopening Changes Exposure, Not the Return History
Waiting leaves the original range in place, with no transaction needed just for reactivation. To change the band, Uniswap says the provider must remove the existing liquidity and create a new position. A new in-range position may require swapping some of the withdrawn token into the other asset.
Take the $4,900 snapshot. For this accounting branch, assume its $20 fee balance is 20 $USDC. Waiting leaves $2,420 of assets. Closing and collecting also produces $2,420 before costs—not a fresh profit on top of that amount.
Suppose the provider then spends 1,000 $USDC to receive $ETH worth $990 after all swap execution deductions. The $ETH and remaining $USDC are worth $2,410. Depositing the required mix into a new range, while retaining any leftovers, does not itself increase that total.
Assume the combined network bill for exiting, swapping and reopening is another $10, paid from a separate wallet. **Cumulative value net of those costs is $2,400**: $200 above the initial $2,200 deposit, but still $760 behind the $3,160 holding benchmark. These are hypothetical costs, not current quotes.
The $20 of collected fees is already included in those assets. Adding it again would double-count income. The swap’s $10 execution shortfall is already reflected in the $990 received; subtracting it again would double-count a cost. The separately paid $10 network bill is deducted once. The swap-cost guide explains that distinction in more detail.
Collecting fees alone does not require removing liquidity, although it incurs a network cost. Before that expense, collection merely moves an asset from the position’s claimable balance to the wallet. After reopening, track the new position, related wallet assets and uncollected fees against the **original** holding benchmark, counting every subsequent cost once. A new position’s fee counter is not a reset of the investment’s cumulative return.
