Fee Systems

In this section, we break down the fees associated with Spool Smart Vaults, how they are generated, and how they are paid out. These take the form of:

The Platform Fee, the Vault Owner Fee, and the Management Fee

Platform Fee

Platform fees are collected by every strategy on DoHardWork (DHW) Implementation. They consist of the Ecosystem Fee and the Treasury Fee and are collected as a Strategy Share Tokens (SSTs) as part of the reward tokens claimed from a Strategy. These fees go directly to the Spool DAO, and the level of the fees is voted on by the DAO.

Ecosystem Fee

Ecosystem fees are collected and distributed to ecosystem participants (SPOOL Token Stakers).

Ecosystem fees are set to 8% of the profit generated at launch, but these fees are adjustable by the Spool DAO and can be up to 20%.

If you want to learn more about the Ecosystem Fees please see Understanding the SPOOL Token.

Treasury Fee

Treasury fees are collected and used to increase protocol treasury value to support future development. Treasury fees are set to 2% of the profit made on launch, however, these fees are adjustable by the Spool DAO and can be up to 10%.

Vault Owner Fee

The Vault Owner fee is taken continuously on profit in the form of SVTs.

SVTs are minted to the vault owner depending on the % of the profit made by the vault.

Vault Owner fees range from 0% to 20% of the profit generated. Vault Owner fees are fixed after Smart Vault Creation.

Vault Owners can claim these fees by withdrawing their SVTs and/or reward tokens from the Smart Vault.

Management Fee

Vaults support a management fee set by the Vault creator during the Vault creation process, with a maximum amount of 5% annually. Management fees are taken continuously as newly minted SVTs, are given to the Vault Owner, while being based on funds within the vault rather than the profit it generates. Management fees are collected on every sync of the smart vault. For each sync, a percentage of fees, proportional to the time elapsed since the last sync, is taken.

Please note, this results in a slightly lower amount of fees collected than the amount chosen. In the largest discrepancy possible, that of a 5% fee taken continuously, this would result in 4.88% fees being taken. In most scenarios, the discrepancy would be much lower. For example, with a management fee of 3% synced every 2 days, the real fees collected would be 2.96%.