Performance Fee: 20% of Profits Only

This is our primary revenue source, and it's structured to align our incentives perfectly with yours. We only make money when you make money. If the vault loses money or breaks even, we earn nothing.

How it works:

The vault tracks every arbitrage trade's profit/loss. At the end of each month, we calculate total net profits (after trading fees). We take 20% of that profit. You keep 80%.

Real example walkthrough:

Month 1 trading activity:

• 450 trades executed

• Average profit per trade: $7 net (after exchange fees)

• Total monthly profit: $3,150

• Performance fee (20%): $630 to Arbitrix

• Your profit (80%): $2,520

Your $10,000 vault position is now worth $12,520. We earned $630 for managing the strategy. Both parties win.

What if the vault loses money?

Let's say a technical issue causes the vault to execute a bad trade and lose $500 that month. Total monthly P&L: -$500.

• Performance fee: $0 (we don't charge on losses)

• Your loss: $500 (the actual trade loss)

We eat the loss alongside you. We have skin in the game. If the vault performs poorly, we don't just earn less—we earn nothing.

High-water mark protection:

We implement a "high-water mark" system to prevent double-charging. If the vault drops in value and then recovers, we don't charge performance fees until it exceeds the previous peak.

Example:

• Vault value peaks at $100,000 (Month 1)

• Drops to $95,000 (Month 2) → We charge $0

• Recovers to $102,000 (Month 3) → We only charge 20% on the $2,000 gain above the previous peak

This is standard in professional fund management but rare in DeFi. We're bringing institutional standards to decentralized vaults.

Why 20%?

Hedge funds charge 20% performance fees. Top DeFi vaults charge 10-30%. We're at the middle of industry standard. But here's the key difference: traditional funds also charge 2% annual management fees regardless of performance. We're charging 0% management for the first 3 months, then only 2% annually after that (compared to industry 2-3% standard).

Your net return after performance fees:

If the vault grosses 500% APY, you earn 400% APY (keeping 80% of profits). If it grosses 200% APY, you earn 160% APY. Our fee is proportional and fair.