Fees & Rewards

Fee Structure

Performance Fee

• Rate: Varies by vault strategy (typically 5-20% of net profits)
• Collection Method: Via share minting (dilution-based)
• Timing: Charged only during harvest operations when profitable
• Recipient: Protocol treasury

High-Water Mark (HWM)

The High-Water Mark ensures users are not charged fees during recovery periods:

• Fees only charged when vault performance exceeds previous peak
• HWM never decreases, only increases with new highs
• Protects users from paying fees while recovering losses

Example Scenario (assuming 10% fee rate)

Day 1: Share Price = 1.00, HWM = 1.00
Day 30: Share Price = 1.20, HWM = 1.00
  → Profit = 0.20, Fee = 0.02 (10%), New HWM = 1.20

Day 60: Share Price = 1.10, HWM = 1.20
  → No profit above HWM, No fee charged

Day 90: Share Price = 1.30, HWM = 1.20
  → Profit = 0.10, Fee = 0.01 (10%), New HWM = 1.30

Fee Calculation

Share Price = Total Vault Assets / Total Shares Outstanding
Your position value = Your Shares × Current Share Price

No Hidden Fees

• No Deposit Fees: 100% of deposits are invested
• No Withdrawal Fees: Full value returned
• No Management Fees: Only performance-based fees
• No Lock-up Penalties: Withdraw anytime

Rewards System

Types of Rewards

• Lending Yields: Interest from borrowers on protocols
• Protocol Incentives: Additional rewards from Suilend and Navi
• LST Staking Rewards: Validator rewards when using LST
• Leverage Amplification: Multiplied yields through strategic borrowing

Daily Compounding

All rewards are automatically harvested and reinvested daily to maximize compound growth. This process is fully automated with no action required from users.

Compound Effect Example

Initial Deposit: 1,000 SUI
Base APY: 20%
Daily Rate: 0.0548%

After 1 year with daily compounding:
Final Value = 1,000 × (1.000548)^365 = 1,221 SUI
Effective APY = 22.1%

Share Price Appreciation

Returns are reflected in vault share price increases. As the vault generates profits, each share becomes worth more SUI.

Fee Examples

Example 1: Profitable Period (with 10% fee)

Vault Performance: +30% over 3 months
Your Position: 1,000 SUI initial deposit
Fee Rate: 10%

Gross Return: 300 SUI
Performance Fee: 30 SUI
Net Return: 270 SUI
Your Final Value: 1,270 SUI

Example 2: Consistent Growth

Daily APY: 0.05%
Monthly Growth: ~1.5%
Annual Growth: ~20%

Fees Collected: Vault-specific rate at each harvest
Example: With 10% fee, Net APY ~18%
Example: With 15% fee, Net APY ~17%

How It Works

1. Vault generates returns through various strategies
2. Rewards are harvested daily
3. If profitable above HWM, performance fee is deducted
4. Remaining profits are reinvested
5. Share price increases, benefiting all holders

Transparency

All fee operations are:

• Recorded on-chain
• Publicly verifiable
• Event-logged for tracking
• Displayed in vault dashboard

Summary

The vault operates with a simple, transparent fee model:

• Performance fees only on profits (typically 10-15%)
• High-Water Mark protection
• Daily compounding of rewards
• No hidden costs or penalties

For detailed strategy information, see Strategy Details.