The Harvest Function and Fees
You may have noticed that part of the inherent value of the ELE token is the value that is given to ELE stakers when a compounding or harvest event occurs. Each of our vault contracts has another contract or strategy interacting with it. As users add LP tokens to a particular vault, rewards begin to accrue. If we use the 3 CRV LP on Polygon as an example, the 3POOL LP's that we staked in the Eleven Finance vault are automatically added to all others and deposited to farm on Curve on Polygon. Here they are gaining $CRV rewards. When the harvest function is called, the contract will take all the pending $CRV rewards, sell them, buy more 3POOL tokens adding these to the Eleven Finance vault. These newly gained LP's are shared proportionally to everyone in the pool - except for a 3.5% harvesting or 'Performance fee' on these rewards. Additionally there is a 0.1% Withdrawal fee on the amount withdrawn. A breakdown of these fees is seen on the right of screen when the vault dropdown is expanded:
Additionally by hovering over the 'question mark' next to Performance fee we can see a breakdown of how this is spent.
Breakdown of Performance fee
ELE Buybacks are where ELE is bought back from the open market and burnt, removed from circulation entirely.
ELE pool dividends are where ELE is bought back from the open market, and re-distributed to those staking in the ELE vaults on Eleven.finance. These dividend pool rewards only occur on BSC, as we decided it is better to use more funds for ELE Buybacks instead.
The Controller fee are funds sent to enable harvesting/compounding of vaults and strategies.
The Platform fee is retained by the Eleven Finance team to continue to support ongoing protocol expansion and development.
So you might be asking yourself, what triggers a harvest and what incentive is there to call this and keep the compounding happening. Previously this was user driven, however with the launch of PancakeSwap V2 pools and the need to re-launch our vault contracts we have taken the opportunity to fully automate this process. A bot will now optimise compounding calls, by assessing rewards accrued and calling as a result. This will see high volume, high reward vaults called with more frequency. Furthermore with vaults on Polygon, due to extremely cheap transaction fees, vaults are compounded approximately between every 15 and 30 minutes.
Eleven Finance charges no deposit fees. If you see a deposit fee in a vault, it's because the underlying project takes it.
Eleven Finance charges a 0.1% withdrawal fees on vaults which provide liquidity, and a 0.2% withdrawal fee for vaults for single staking. This is a security measure to prevent making flash loans profitable. When someone withdraws from a vault, this fee is fully redistributed between all people in the vault they withdrew from.
The performance fee varies from chain to chain and from vault to vault. On chains where the gas fees are higher (such as Avalanche), the performance fee has to be higher in order to make compounding profitable. The performance fee is also different for lending vaults, where we charge no fees, and for vaults we partnered up with other projects (for example WaultSwap on Binance Smart Chain), where we used a part of the performance fee to buyback their token in exchange for a promotion.
Last modified 1yr ago