Fee module

The Fee module provides a set of functionalities to handle, calculate, and distribute fees within the smart contract system. This includes management fees, performance fees, entry and exit fees, and protocol fee.

  1. Management Fee:

    • Continuous constant fee set up by the vault manager and charged based on the total value locked (TVL).

  2. Performance Fee:

    • Based on the difference between the asset's current price and its high watermark, multiplied by the fee percentage.

  3. Entry and Exit Fees:

    • Based on the amount depositing or withdrawing and the set fee percentage.

  4. Protocol Fee:

    • A fraction of the other fees charged by the protocol.

Fees are charged every time:

  • User deposits to /withdraws from the vault (to make sure new depositors are not be charged for the period before they entered the vault and the current depositors are charged for the period they were using the vault)

  • Asset manager calls the function to charge fees (except for entry/exit fees which are only charged once upon deposit/withdrawal)

Fees are charged in a form of vault tokens (index tokens) that are being minted according to the calculations.

To support further development of the platform Velvet Capital takes Administrative Fees on the vaults created on the platform. The fees range between 10% and 25% of the total fees earned by the asset manager. The larger the vault, the smaller percentage we take. The minimum amount of administrative fees is 0.3% annualized fee of the total TVL that will be deducted even if the asset manager doesn’t set up any fees. The fees are charged in a form of newly minted vault tokens based on the above calculation and sent to the project treasury.

Last updated