Applying this to AMM LP positions: Fees collected on a LP position *is always* and everywhere compensation for the expected losses from negative gamma The *is always* part relies on the market to make it happen. This structurally can't happens when LPing directly in an AMM. - Options premium & theta decay are too low? No problem, just buy that option and collect those positive gamma gainz. - Fees in that AMM are too low? Too bad, best you can do it to pull liquidity. BUT, the same LP positions deployed on Panoptic *can be shorted*. This means low fees are a signal that IV is repressed, which directly lead to higher expected returns from that positive gamma exposure. Cheap convexity is terrible for LPs, but it's great for options buyers.