💹Fee Recipient

The fee recipient

Whenever a guardian is changed, a fee recipient is designated. The fee recipient could be one of the following depending on the use case:

• The guardian

• A designated wallet by the guardian

• The Aera treasury

• etc.

The fee recipient is only relevant for vaults with a nonzero fee.

How to claim fees

The fee recipient can claim fees using claim at any point.

When to claim fees

Fees accumulate as a proportion of the vault holdings. Note that this proportion is not “marked” when the client withdraws or deposits to the treasury. Instead it will result in a forced claim. We recommend fee recipients to be claiming small accumulated fee amounts frequently for the following reasons:

• The client may decide to withdraw/deposit, forcing a claim at an inconvenient time

• At a large enough accumulated fee level the client may feel like you are using the vault to manage your own capital

How fees are calculated

• A fee rate is set upon vault creation and capped at 0.0000001% per second (3.1536% per year).

  • Note that the fee has a small amount of negative compounding in the event that vault value is constant. E.g., if vault value starts at $10M, some of that will accrue to the fee recipient and therefore the future fee amount will be derived from smaller vault value numbers

  • This works the opposite way as the vault grows or receives further inflows as more frequent recalculation will lead to the fee being calculated against a larger vault value amount

• Fees are recalculated based on the current vault value() and the per second fee rate. They are accrued incrementally during

  • Actions that (potentially) modify vault value: withdraw, deposit, execute, submit

  • Actions that terminate existing guardianship: pause, finalize, setGuardianAndFeeRecipient

  • During a setHooks update

  • Prior to fees being claimed

• NOTE: If an underlying oracle reverts, then the value() function will revert and fees will use the last measured vault value instead.

Trust model

It's assumed that the guardian trusts and is incentivized to help the fee recipient. In particular, the guardian will generally try to maintain sufficient reserves of the fee token so that the fee recipient can always claim what is earned.

It's assumed that the vault owner and fee recipient have understood how the fee rate may impact overall annual fee amount under different scenarios based on expected recalculation frequency and vault value evolution.