This post is to discuss the upcoming text proposal to reduce the platform fee for Real Yield ETH from 2% to 1%. If the proposal passes, a steward update will enable the strategists to make a function call that changes the fee to 1%.
Based on feedback from users and potential integration partners, a 1% platform / 20% performance fee structure seems more appealing and consistent with competitor products. While this reduces the percentage of fees earned by the protocol, we believe that this will be offset by increased deposits, composability, and adoption.
Which competitors are you referencing that have this lower fee structure?
Also, instead of putting all the fee reductions on the platform, maybe you could take some of it as well from the performance. If it lowers to 1% platform, then make it closer to 10% 10% split between platform and strategist. Seems to make sense to share costs, no?
Origin ETH has a 0% platform fee, 20% performance fee, and 0.5% redemption fee: https://docs.oeth.com/
Instadapp Lite has a 0% platform fee, 20% performance, and 0.05% redemption fee: Fees - Instadapp Lite
icETH has a 0.75% platform fee and 0% performance fee: Interest Compounding ETH Index
Yearn has a 20% performance fee on their ETH vault.
The industry standard is 20% performance fee but there is less clarity on the platform fee. In general, users prefer performance fees because it only takes from profits rather than base capital. Because Sommelier vaults are more dynamic than competitors, we think a platform fee is also justified. However, 1% is closer to industry standard. This is also consistent with direct feedback from potential depositors