0.1% Withdrawal Fee
Most single strategy vaults incorporate a 0.1% withdrawal fee that is redistributed to vault users.
Without this fee, it is theoretically possible for an individual to deposit a large quantity of underlying assets, call a vault harvest, and exit the vault with a large share of the vault's rewards. One iteration may not be highly profitable, but consistent, automated attacks can compound, and take yield from well-intentioned users.
Incorporating the fee deters such behaviour, because entering and exiting a crypt with large capital for the purpose of harvesting would result in a net loss.
The community requested that an alternative solution be developed, so that they would not also have to face a fee when exiting vaults.
Therefore, new vaults utilise a gated harvest function that is automated by keepers. These new vaults no longer utilise a withdrawal fee, but anonymous users can no longer earn harvest-caller rewards and fee distributions.
If you are unsure whether a vault has a withdrawal fee or not, you can follow these steps:
- 1.Identify the vault of interest and select the 'More Info' button.
- 2.Select the 'Strategy Contract' link to view the contract on FTMScan.
- 3.Under the 'Contract' tab, select 'Read as Proxy' to read the contract parameters.
- 4.Locate the 'securityFee' dropdown and click it to read its value.
- 5.If the value is 10, then a 0.1% withdrawal fee applies. If the value is 0, there is no withdrawal fee.