Variable yield depositors experience more severe losses under low fees + yield farming income and highly negative ETH returns (the top left corner of the sensitivity table below). When variable yield depositors contribute ETH, they are effectively borrowing USD in order to get levered exposure to LP tokens derived from 50% USD and 50% ETH - this has a dampening effect on ETH price movements. It will limit losses relative to ETH in scenarios where ETH declines in value. As ETH increases in value, their leverage and fee income generally more than compensates for the fact that the LP tokens are half derived from USD and for impermanent loss. Variable yield depositors outperform ETH in the majority of scenarios, but may underperform those with very low fee income and extreme ETH weakness, or those with violent ETH movements to the upside.