Fees

The fee schedule#

Aqueduct only earns when depositors do. If a vault earns nothing, or loses money and has not yet recovered, nobody pays anything. The APY shown in the app is the net APY, already after the fee: net = gross × (1 − fee).

The high-water mark#

Each vault stores a high-water mark: the highest share price on which a performance fee has been charged. The fee applies only to the part of the share price above it:

After charging, the mark moves up to the new share price after the fee. If the price later falls, for example because a venue loses money, no fee is charged until the price has climbed back above the mark. A drawdown is never charged twice.

The mark belongs to the vault, not to each depositor. If you deposit while a vault is below its mark, the recovery up to the mark is yours fee-free. The mark started at the first share price the program saw after the fee was introduced.

Worked example#

A Rapids vault (10% fee) holds 1,000,000 USDC in 1,000,000 shares, and its high-water mark is 1.0000. Each row is one fee accrual by the program.

On the first gain the fee is 10% of 5,000 = 500 USDC. The program mints 497.76 new shares for the treasury, exactly enough to be worth 500 USDC at the post-fee price of 1.0045. Depositors keep 4,500 of the 5,000. The loss and its recovery cost nothing; only the last 1,000 above the old mark is charged.

Estimate your fee#

A year at a constant rate, ignoring compounding:

How fees are collected#

The fee never moves USDC out of the vault. It dilutes: new shares are minted to the treasury and the treasury redeems them like anyone else.

1. Accrual. Every deposit, withdrawal and fee sweep first values the vault, then adds the fee owed since the last accrual to the vault's pending_fee_shares. Those shares already count in the share price, so nobody can deposit or withdraw around a fee.
2. Sweep. The collect_fees instruction accrues once more and mints the pending shares to the treasury's share account. It is permissionless: anyone can call it, but the shares can only go to the treasury set in the program config.
3. Schedule. The keeper calls collect_fees for both vaults every 60 minutes.

The mark only moves once at least one base unit of shares (0.000001) is due, so frequent tiny accruals can never round the fee away. The keeper reports its latest sweep at /fees:

Other costs#

• Solana network fees. You pay the normal transaction fee for each deposit and withdrawal, plus a refundable rent deposit the first time a token account is created for you. The keeper pays for its own transactions.
• Bridge fees. Moving funds to or from a cross-chain venue costs a CCTP fee. On devnet the program simulates it by burning 1 bp of every cross-chain allocate and deallocate, which lowers total assets for every depositor. The keeper only makes such a move when it expects the yield to cover the cost at least twice; see the cost check.