In this paper, we propose a novel linear physicallayer network coding (LPNC) for Rayleigh fading 2-way relay channels (2-WRC). Rather than the simple modulo-2 (bit-XOR) operation, the relay directly maps the superimposed signal of the two users into the linear network coded combination in GF(2^2) by multiplying the user data by properly selected generator matrix. We derive the constellation constrained capacities for LPNC and 5QAM denoise-and forward (5QAM-DNF) [2] and further explicitly characterize the capacity difference between LPNC and 5QAM-DNF. Based on our analysis and simulation, we highlight that without employing the irregular 5QAM mapping and sacrificing the spectral efficiency, our LPNC in GF(2^2) is superior to 5QAM-DNF scheme in low SNR regime while they achieve equal performance in the the moderate-to-high SNR regime.

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