# Performance Fee Mechanics {% hint style="info" %} Operator and jurisdiction: BASIS is operated by BASIS DIGITAL INFRASTRUCTURE LTD, a Seychelles IBC (LEI: [254900IX2F2KCWNSSS64](https://lei.bloomberg.com/leis/view/254900IX2F2KCWNSSS64)). {% endhint %} *** ## Fee Structure Summary | Fee Type | Rate | When Applied | | --------------- | ----------------: | -------------------------------------------------------- | | Performance Fee | 20% of net profit | Deducted before reward distribution to staking positions | | Management Fee | 0% | Never charged | | Deposit Fee | 0% | Never charged | | Swap Fee | 0.01% | On same-token 1:1 conversion | | Withdrawal Fee | 0.05% | On withdrawal | {% hint style="success" %} Supported same-token swaps only: * BTC → stBTC * ETH → stETH * SOL → stSOL * PAXG → stPAXG There is no cross-asset swap function. {% endhint %} *** ## How the Performance Fee Is Calculated {% hint style="info" %} $$ \text{Net Yield} = \text{Gross Yield} - \text{Execution Costs} $$ $$ \text{Performance Fee} = \text{Net Yield} \times 20% $$ $$ \text{User Distribution} = \text{Net Yield} \times 80% $$ {% endhint %} | Component | Description | | --------------- | -------------------------------------------------------------------------------------------- | | Gross Yield | Funding payments, basis spreads, structural alpha capture, and protocol-native yield sources | | Execution Costs | Exchange fees, slippage, gas, hedging overhead, and routing costs | | Net Yield | Yield available for distribution after costs | Rewards accumulate in real time as the same stToken in the Staking Wallet. We apply the performance fee before rewards are credited to staking positions. *** ## Worked Example {% tabs %} {% tab title="ETH example" %} Assumptions: * User deposits 10 ETH through a connected Web3 wallet * ETH is swapped 1:1 to stETH * Position is staked for a 30-day period * Entry reference value: 30,000 USDT-equivalent * Gross yield for the period: 600 USDT-equivalent * Execution costs: 120 USDT-equivalent | Step | Calculation | Amount | | --------------------- | ------------ | -----------------: | | Gross yield | 600 | 600 | | Execution costs | -120 | -120 | | Net yield | 600 - 120 | 480 | | Performance fee (20%) | 480 × 20% | -96 | | User receives | 480 × 80% | 384 | | Net return to user | 384 / 30,000 | 1.28% over 30 days | | {% endtab %} | | | {% tab title="90D booster example" %} Assumptions: * Same base conditions as above * 90-day booster applied * Booster multiplier: +50% | Step | Calculation | Amount | | ----------------------------- | ----------- | -----: | | Base gross yield over 90 days | 600 × 3 | 1,800 | | Booster-adjusted gross yield | 1,800 × 1.5 | 2,700 | | Execution costs | \~540 | -540 | | Net yield | 2,700 - 540 | 2,160 | | Performance fee (20%) | 2,160 × 20% | -432 | | User receives | 2,160 × 80% | 1,728 | {% hint style="warning" %} Current booster schedule: * 14D: +10% * 30D: +20% * 90D: +50% * 180D: +100% (2×) For fixed pools, unstaking is available only after the lock-up period ends. There is no early exit option. {% endhint %} {% endtab %} {% endtabs %} *** ## Why Performance Fees Align Incentives A performance fee aligns operator economics with realized user outcomes more closely than an asset-based management fee. | Fee Type | Operator Earns When | User Outcome | | --------------- | -------------------------------------------------- | ------------------------------------------------- | | Management fee | Assets remain deposited, regardless of performance | Operator may earn during flat or negative periods | | Performance fee | Platform generates positive net yield | Operator earns only when users earn | BASIS charges 0% management fee and 20% performance fee only. This means: * If net yield is zero, no performance fee is charged * If net yield is negative, no performance fee is charged * Operator compensation depends on positive realized performance, not simply asset growth {% hint style="info" %} This model is supported by deterministic execution, mathematical portfolio constraints, and state-machine-based risk controls across the BASIS execution stack. {% endhint %} *** ## High-Water Mark A high-water mark means performance fees apply only to new net profits above the previous peak. If a pool declines below its prior high-water level and later recovers, performance fees are charged only on gains above that previous peak. Recovery back to the earlier level is not charged again. BASIS applies high-water mark logic on a pool-cycle basis. If positions are rolled across cycles, refer to the relevant pool documentation for cycle reset handling. *** ## Operational Context {% hint style="info" %} BASIS combines research from Base58 Labs with proprietary routing and execution infrastructure designed for: * Sub-50μs latency * 100K+ OPS throughput * Deterministic execution quality * Structural alpha capture under strict risk constraints {% endhint %} These controls are intended to reduce avoidable execution loss and preserve execution precision across staking-related yield strategies. *** ## Related References * [Fee Calculator](/getting-started/fee-calculator.md) * [Fees & Limits](https://docs.basis.pro/reference/fees-and-limits) * [Booster System](/economics-and-rewards/booster-system.md) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.basis.pro/economics-and-rewards/performance-fee-mechanics.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.