Fees

We take a 2% annual performance fee taken over the harvest periods deducted from the vaults Harvest APY.

Let’s say a vault has a 10% harvest APY, a 5% trading APR and a 5% performance fee, that would assume that after performance fee deductions the harvest APY would be 9.5%. This would give a Vault vROI of 14.5%.

$$𝑣𝑅𝑂𝐼 = 𝐻𝑎𝑟𝑣𝑒𝑠𝑡𝐴𝑃𝑌 ( 1 − 𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒F𝑒𝑒) + 𝑇𝑟𝑎𝑑𝑖𝑛𝑔𝐴𝑃𝑌$$

Performance fee sent to treasury (distribution: strategist/devs, redistribute to MIRO stakers via token buy backs, etc).

There is also 1% deposit fee for all deposits. This deposit fee is more of a contribution towards the cost incurred with regards to harvesting/compounding and vault maintenance i.e., gas costs.

Although the Harvest/Compound function is open for all to call, MRHB will also use collected deposit fees and use them to pay for the gas cost of Harvesting/compounding and to cover the costs of vault maintenance. Deposit fees will be taken in the asset being deposited, i.e., stable coins and will be sent to a specific treasury smart contract wallet that will use these fees to purchase the native layer 1 cryptocurrency for the chain the vault is deployed on.

This mechanism also acts as a deterrent for users aiming to ‘game the system’. For example, a user may deposit just before a harvest and withdraw straight after to pocket some risk-free return at the expense of other users that have been in the vault between the last harvest and the current harvest. This deposit fee ensures that the profit in a single day/compound period is not more than the cost of depositing and thus removes the risk of gaming.

Example

For example, a USDT-USDC Uniswap vault on Ethereum will take deposit fees in both USDC and USDT. This USDC/USDT will be used to purchase ETH and pay for the gas needed to harvest and compound rewards periodically. The more fees collected the more often the vault can harvest/compound, increasing the Harvest APY. This is a one-time fee and a user’s harvesting/compounding costs will be covered throughout the period of time they are deposited in the vault. Even if the collected deposit fees are not enough to cover the cost, MRHB will allocate the necessary funds to ensure that the minimum compound period is met.

It is important to note that the vROI is only an estimate.

Trading fees are based on daily volume of the underlying strategies liquidity pool and the APR obtained by incentivized rewards are a function of the number of emissions being emitted on any given day as well as the amount of locked LP tokens being used to determine the pro-rata allocation of those emissions. Both are subject to variations, hence the vROI displayed by the vault is reflective of these factors in real time. In reality the vaults vROI could change every second as we will compute the raw vROI using the underlying input parameters every second (trading APR and Harvest APY).

There will be an analytics page for each vault whereby users can assess any volatility in these parameters over time. For example, a user comes in and sees that a specific USDC/USDT stable coin vault is displaying a vROI of 100%. On the vaults analytics page the user can see if this is abnormal by checking if this vROI has been consistent over time or if it is just a daily outlier due to some drastic change in one of the underlying parameters. Ie, maybe the TVL of the pool dropped suddenly or the token price shot up or both. Even if it is a daily outlier, It still does mean that users who have already deposited into the vault will earn 0.27% (100%/365days) of daily vROI for that day but assuming this will last is probably not realistic.