Fee Structure
Overview
The Noderr Protocol implements a transparent, competitive fee structure designed to sustain protocol operations while maximizing returns for users. Our fee model features zero management fees and tiered performance fees (15%/20% mgmt / tiered perf (15-25%)) charged only on profits above a risk-adjusted hurdle rate. All fees are governed by the DAO and can be adjusted through governance proposals.
Fee Categories
1. Vault Fees
Performance Fees
Tiered Rates by Vault Risk:
| Vault Type | Performance Fee | Hurdle Rate | Target APY |
|---|---|---|---|
| Conservative | 15% | 4% | 8-12% |
| Moderate | 20% | 6% | 12-18% |
| Aggressive | 25% | 8% | 18-28% |
Rationale: Higher risk vaults have greater alpha potential, justifying higher performance fees. Lower risk vaults offer more competitive fees to attract conservative capital.
Application: Only charged on profits above the risk-adjusted hurdle rate
Distribution:
- 40% to Protocol Treasury
- 30% to Node Operators
- 20% to Development Fund
- 10% to DAO Reserve
Example (Moderate Vault):
User deposits: 10,000 USDC
Vault generates: 15% return (1,500 USDC profit)
Hurdle rate: 6% (600 USDC)
Excess profit: 900 USDC
Performance fee (20% of excess): 180 USDC
User receives: 11,320 USDC (13.2% net return)
Management Fees
Rate: 0% (zero management fees across all vaults)
Noderr charges no management fees. Unlike traditional funds that charge 1-2% annually regardless of performance, Noderr only earns when users earn. This aligns our incentives with yours.
2. Transaction Fees
Deposit Fees
Rate: 0% (no deposit fees)
Rationale: Encourage capital inflows
Withdrawal Fees
Standard Withdrawal: 0%
Early Withdrawal (<21 days): 0.5% penalty
Purpose: Discourage short-term speculation, stabilize capital base
3. Node Operation Fees
Node Registration
Utility NFT Mint: 100 NODR (one-time)
Purpose: Sybil resistance, commitment signal
Refundable: No (NFT retains value)
Node Service Fees
Third-Party Services: 5-10% of service revenue
Application: When nodes provide services to external protocols
Distribution:
- 70% to Node Operator
- 30% to Protocol Treasury
4. Governance Fees
Proposal Submission
Fee: 1,000 NODR
Refundable: Yes, if proposal passes
Purpose: Prevent spam proposals
Delegation Fees
Fee: 0% (free delegation)
Purpose: Encourage governance participation
Fee Comparison
Competitor Analysis
| Protocol | Performance Fee | Management Fee | Hurdle Rate |
|---|---|---|---|
| Noderr (Conservative) | 15% | 0% | 4% |
| Noderr (Moderate) | 20% | 0% | 6% |
| Noderr (Aggressive) | 25% | 0% | 8% |
| Yearn Finance | 20% | 2% | No |
| Convex Finance | 17% | 0% | No |
| Beefy Finance | 4.5% | 0% | No |
Value Proposition
Noderr's fee structure is competitive while ensuring:
- Sustainable protocol development
- Fair node operator compensation
- Alignment of incentives
- Long-term protocol health
Fee Distribution
Revenue Allocation
| Recipient | Allocation | Purpose |
|---|---|---|
| Protocol Treasury | 40% | Development, security, operations |
| Node Operators | 30% | Network security and decentralization |
| Development Fund | 20% | Core team and contributors |
| DAO Reserve | 10% | Emergency fund and community initiatives |
Fee Optimization
Dynamic Fee Adjustment
Fees may be adjusted based on:
- Market Conditions: Lower fees during bear markets
- Competition: Match or beat competitor rates
- Protocol Performance: Higher fees if outperforming
- Treasury Health: Adjust based on reserve levels
Governance Control
All fee changes require:
- Governance proposal
- Community vote
- 7-day timelock
- Transparent communication
Fee Transparency
Real-Time Tracking
Users can view:
- Current fee rates by vault
- Historical fee revenue
- Fee distribution breakdown
- Comparison to competitors
Onchain Verification
All fees are:
- Collected onchain
- Publicly verifiable
- Automatically distributed
- Auditable by anyone
Fee Waivers and Discounts
Utility NFT Holders
- 10% discount on all fees
- Increased with NFT tier/rarity
High-Value Users
- Volume discounts for large deposits
- Reduced fees for long-term stakers
- VIP tiers for institutional users
Promotional Periods
- Launch promotions (reduced/zero fees)
- Seasonal campaigns
- Referral bonuses
Future Fee Mechanisms
Planned Enhancements
- Fee Buyback: Use fees to buy and burn NODR
- Revenue Sharing: Direct revenue share to stakers
- Dynamic Pricing: AI-optimized fee rates
- Crosschain Fees: Unified fee structure across chains
Fee Governance
Adjustment Process
- Proposal submitted with new fee structure
- Community discussion (7 days)
- Governance vote (7 days)
- Timelock period (48 hours)
- Automatic implementation
Historical Changes
Track all fee changes:
- Date of change
- Old vs new rates
- Rationale
- Impact analysis
Fee Calculators
Estimate Your Costs
Use the protocol interface to:
- Calculate expected fees
- Compare vault options
- Optimize deposit timing
- Plan withdrawals
See Also: