Fees & Profit Share
Overview
VULTR does not use a generic “management fee / performance fee / deposit fee” model.
Instead, VULTR captures value through a fixed profit distribution split applied when liquidation profits are realized and recorded on-chain.
In other words:
Profits are only distributed when the bot calls record_profit.
That distribution is the protocol’s value-capture mechanism.
Profit Distribution
When liquidation profit is realized (in USDC terms) and recorded, it is distributed as:
80% → Vault Pool (Depositors)
15% → Staking Rewards Vault (VLTR stakers)
5% → Treasury (Protocol fees)
What this means for users
Depositors (Vault users)
Depositors capture value primarily through vault growth:
The pool receives 80% of realized profit
This increases the pool’s assets relative to outstanding shares
Result: each vault share becomes redeemable for more USDC over time, assuming net positive performance
Stakers (VLTR staking)
Stakers capture value through reward distribution funded by realized liquidation profit:
15% of realized profit is routed to the staking rewards vault
The staking program distributes rewards via its accounting model (reward-per-token updates + permissionless claims)
Treasury (Protocol operations)
The protocol captures 5% of realized profit to fund:
infrastructure (RPC, hosting, monitoring)
continued development and security work
operational reserves
Where “Fees” Actually Exist
In VULTR, the only explicit fee-like mechanism described in the architecture is:
Treasury Allocation (5%)
This is the protocol’s ongoing value capture. It is not charged on deposits/withdrawals; it is taken from realized liquidation profit at the time profit is recorded.
Execution Costs vs. Protocol Allocation
It’s important to separate two concepts:
A) Execution costs (strategy reality)
These affect how much profit is realized in the first place:
swap price impact / slippage
failed attempts / retries
liquidation settlement friction
general network and transaction overhead
These costs reduce profit before it becomes distributable.
B) Distribution split (protocol design)
Once profit is realized and recorded:
the split is applied: 80 / 15 / 5
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