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Network coding is an attracting technology that has been shown to be able to improve the throughput of wireless networks. However, there still lacks fundamental understanding on how network coding works under realistic scenarios. In this paper, we examine the performance of a recently proposed network coding system under a realistic wireless physical layer and practical random access mechanisms. We propose a key performance measure called “encoding number”-the number of packets that can be encoded via network coding in each transmission. We provide an upper bound on the encoding number for the general coding topology, and derive the average encoding number and system throughput for a general class of random access mechanisms. Based on the practical coding system, we also derive a tighter upper bound on the throughput gain for a general wireless network. Our results are of fundamental value for coding-related MAC/Routing protocol design and analysis.