Protocol Fees and Reserves

Protocol Fee Revenue

There are 2 types of fees charged by the Vault:

• Deposit Fees: equal to 0.25% of the USDC amount deposited.

• Performance Fees: equal to 15% of the net income made by each Vault depositor.

If a user deposits 10,000 USDC into the Vault, a Deposit Fee of 25 USDC will be charged at the time of deposit.

If the value of the user's Vault position increases to 11,000 USDC at time of their withdrawal. The Vault will charge a Performance Fee of:

15% x 1000 USDC = 150 USDC

Protocol Reserve Fund

The Protocol Reserve Fund is a pool of assets held to mitigate against Funding Risk and Liquidation Risk discussed in the next section. The SuiDollar Team will initially seed the Protocol Reserve Fund with 100,000 USDC.

Deposit and Performance Fee Revenue earned by the Vault will also be accumulated into the Protocol Reserve Fund, allowing it to grow alongside the value of the assets managed by the Vault.