💵Fees

Execution

When the Fama vault receives a signal and it executes a swap, there are 3 costs that are involved:

• Gas fee This is paid directly to the ethereum network to process the transaction. It varies depending on the congestion of the network. Fama deducts this cost from the value of the vault in order to fulfill the transaction. As the funds are transacted in bulk, this is splits the fee across all users and saves money.

• Swap fee Fama uses decentralized exchanges to carry out the swap, currently this is Uniswap and the fee is paid to thier protocol. The swap fee is a fixed percentage and varies depending on the asset and pool used. For example with ETH/USDC, this 0.15% and it is deducted from the entire quantity swapped.

• Slippage This isn't technically a fee but an inefficiency that can occur within the market. If there isn't the entire amount required at the market rate to faciliate the swap, some of the quanitity may be fulfilled at a rate slightly below the market rate. Slippage varies depending on the asset and the size of the liquidity pool for it. More established assets like ETH have larger and more stable liquidity pools. We have set our maximum acceptable slippage at 0.25%. The average slippage we see currently is around 0.1% for assets currently supported.

Performance During our Beta stage, there is no performance fee taken! Once we leave Beta, 5% of profit will be taken as a performance fee. This will be deposited into the Fama treasury and be used to develop and maintain the ecosystem. When the Fama DAO goes live, it will have the authority to adjust performance fees and spending from the Fama Treasury.