Cost basis is lifecycle-based
P&L is interpreted against lifecycle cost basis. Cost basis updates when you add or remove capital across the life of the position.
This keeps performance interpretation coherent across all management actions.
How accounting updates by action
| Action | Accounting behavior |
|---|---|
| Open position | Cost basis increases by gross USDC deposited. |
| Add capital | Cost basis increases by gross USDC added. |
| Remove capital | Cost basis decreases by measured value removed from the position. |
| Collect fees | No cost-basis increase. Fees are realized value, not new principal. |
| Compound fees | No cost-basis increase from wallet principal. Fees are recycled into liquidity. |
| Change range | No lifecycle reset. Position continuity and accounting context are preserved. |
How to read P&L after common actions
| Action | Expected interpretation |
|---|---|
| Collect fees | Value location changes from pending to realized context; performance context remains coherent. |
| Compound fees | Fees are reinvested; this is not treated as fresh wallet principal. |
| Add/remove capital | Cost basis changes with principal actions, so baseline updates logically. |
| Change range | Lifecycle continuity is preserved; interpretation does not reset like a fresh unrelated position. |
State components
| Component | Meaning |
|---|---|
| Pending fees | Attributed fees not yet collected or compounded. |
| Collected fees | Realized fee output from collect actions. |
| Compounded fees | Fee value converted into additional active liquidity. |