> For the complete documentation index, see [llms.txt](https://alphix.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://alphix.gitbook.io/docs/products/unified-yield.md).

# Unified Yield

Traditional liquidity provision has a fundamental inefficiency: LP funds sit idle in the pool waiting for swaps. In a typical 24-hour period, deposited capital might only be actively used for a fraction of the time. The rest of the time, it earns nothing.

Unified Yield solves this by routing idle liquidity into yield-generating vaults, allowing LPs to earn lending yield continuously while remaining fully available for swaps through Just-In-Time (JIT) Liquidity Providing and Flash Accounting.

This results in a dual-yield position. LPs earn swap fees from trading activity AND lending yield from the underlying vaults, simultaneously, from the same capital. \
\
Because all returns are automatically reinvested, Unified Yield converts traditional LP APR into true APY. This enables a capital-efficient, “set-and-forget” liquidity strategy on top of Uniswap v4—maximizing utilization without active position management.

{% hint style="info" %}
Unified Yield positions use ERC-4626 vault shares, a tokenized representation of your deposit that automatically accrues yield.
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***

### How It Works

At the core of Unified Yield sits the JIT liquidity mechanism. Here's what happens:

{% hint style="warning" %}
The explanation below is simplified to convey the underlying logic. The production implementation includes additional safeguards.
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{% stepper %}
{% step %}
**Deposit**

When you provide liquidity, your tokens are deposited into the Hook contract. The Hook immediately routes these tokens to ERC-4626 yield vaults based on the asset's yield strategy, where they begin earning lending yield.

You receive Hook shares representing your position. These shares automatically appreciate as yield accrues.
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{% step %}
**During Swaps (JIT)**

When a swap occurs, the Hook uses flash accounting to make your liquidity virtually present in the pool:

1. **beforeSwap**: Liquidity is flash-added to the pool
2. **Swap executes**: Against full available liquidity
3. **afterSwap**: Net amounts settle. Tokens received go to the vault, tokens sent come from the vault

Your capital earns the swap fee while never actually leaving the yield-generating position.

Additional benefit: swap fees are automatically compounded instead of sitting idle like in standard Uniswap positions.
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**Withdraw**

When you withdraw, the Hook burns your shares, retrieves the underlying tokens from the vault (including all accrued yield), and sends them to your wallet.
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{% hint style="info" %}
The liquidity is only "in the pool" at the exact moment of the swap. No capital sits idle.
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### Position Characteristics

Unified Yield positions differ from standard concentrated liquidity positions in several ways:

<table data-view="cards"><thead><tr><th></th><th></th></tr></thead><tbody><tr><td><strong>Simplified Ranges</strong></td><td>Standard pools use full range. Stable pools use concentrated positions. No manual range management required.</td></tr><tr><td><strong>Vault Shares</strong></td><td>You receive Hook shares instead of an NFT. Shares are fungible and automatically accrue yield.</td></tr><tr><td><strong>Dual Yield</strong></td><td>Earn from two sources: swap fees from trading activity and lending yield from the underlying vaults.</td></tr></tbody></table>

<details>

<summary><mark style="color:$info;">APR Breakdown</mark></summary>

Unified Yield positions display a combined APR from multiple sources:

| Component         | Source                                                                                            |
| ----------------- | ------------------------------------------------------------------------------------------------- |
| Swap APR          | Trading fees from swaps                                                                           |
| Unified Yield APR | Pro rata lending rate based on both tokens vaults                                                 |
| Additional APR    | Protocol-level rewards (points) and potential ecosystem incentives (airdrops, liquidity programs) |

The total APR shown is the sum of all components. Actual returns vary based on pool volume, vault rates, and market conditions.

</details>

<details>

<summary><mark style="color:$info;">Supported Assets</mark></summary>

Unified Yield works with assets that have compatible yield vaults. Each asset is routed to a vault based on its yield strategy.

<table data-view="cards"><thead><tr><th></th><th></th></tr></thead><tbody><tr><td><strong>ETH</strong></td><td>Wrapped ETH lending vault on Aave</td></tr><tr><td><strong>USDC</strong></td><td>USDC lending vault on Aave</td></tr><tr><td><strong>USDS</strong></td><td>USDS lending vault on Sky</td></tr><tr><td>USDT</td><td>USDT lending vault on Aave</td></tr></tbody></table>

</details>

### Why it Matters

**Liquidity Providers**

**Traditional LPs face idle capital.** Funds deposited into a pool only earn when swaps occur. Between trades, capital generates zero return. This inefficiency compounds over time, especially in lower-volume pools.

**Alphix it.** Unified Yield ensures your capital is always working. When not used for swaps, it earns lending yield in underlying vaults. When swaps occur, JIT accounting captures the fees. <mark style="color:$info;">No idle capital. Dual yield streams.</mark>

{% hint style="success" %}
Earn swap fees AND lending yield. Capital never sits idle.
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**Traders**

**Traders need deep liquidity.** Shallow pools mean higher slippage. LPs constantly moving capital between protocols fragments available depth.

**Alphix it.** Unified Yield keeps liquidity in the pool while earning external yield. LPs have no reason to withdraw for better rates elsewhere. This concentrates liquidity and improves execution for traders.

{% hint style="success" %}
Deeper liquidity. Better execution.
{% endhint %}

**Protocols**

**Protocols struggle with LP retention.** Liquidity providers constantly seek the highest yield, leading to mercenary capital that moves at any rate differential. Incentive programs become expensive arms races.

**Alphix it.** Unified Yield makes Alphix pools inherently more attractive by offering dual yield. Protocols leveraging our pools benefit from stickier liquidity without additional incentive spent.

{% hint style="success" %}
Stickier liquidity. Lower incentive costs.
{% endhint %}