# Fees

Every vault charges **zero management fee**. The protocol earns only a **performance fee**, and only on realized gains above a hurdle and a high-water mark.

> Rates are set per vault onchain. They change only through [governance](../protocol/governance/README.md), today a 2-of-3 Safe behind a 7-day timelock that owns every vault.

## Vault fees

| Vault | Management Fee | Performance Fee | Soft Hurdle | High Water Mark |
|-------|----------------|-----------------|-------------|-----------------|
| **Conservative** | 0% | 10% | 4% | Yes |
| **Moderate** | 0% | 10% | 6% | Yes |
| **Aggressive** | 0% | 15% | 8% | Yes |
| **Hedged** | 0% | 12% | 4% | Yes |
| **Inverse** | 0% | 15% | 8% | Yes |
| **Configurable** | 0% | 10% | 6% | Yes |
| **Prediction Markets** *(planned, not yet deployed)* | 0% | 25% | 15% | Yes |

- **Management fee:** none. No fee is charged on assets under management on any vault.
- **Performance fee:** charged only on realized gains, and only from the vault's trading bucket. It is never taken from the principal-protected floor.
- **Soft hurdle:** the minimum return before a performance fee applies. Each vault has its own (4%–15%), so depositors keep all returns up to the hurdle.
- **High-water mark (HWM):** the fee applies only to new profit above the vault's previous peak NAV-per-share. If value declines, no fee is charged until the vault recovers past that peak.

**Source of truth:** each vault's onchain fee settings on Base Sepolia. Read `performanceFeeBps()` and `hurdleRateBps()` on any vault. Vaults are ERC-7540 async and denominated in tUSDC.

Performance fees go to the protocol treasury wallet. Every vault's `feeCollector()` returns that wallet.

**Example (Moderate Vault: 0% management, 10% performance, 6% hurdle)**:
```
User deposits:        10,000 tUSDC
Vault generates:      15% return (1,500 tUSDC gain)
Management fee:       0 tUSDC
Hurdle (6%):          600 tUSDC
Gain above hurdle:    900 tUSDC
Performance fee:      90 tUSDC (10% of the gain above hurdle, from the trading bucket)
Net profit:           1,410 tUSDC (14.10% net return)
```

## Other fees

| Fee | Rate | Note |
| :--- | :--- | :--- |
| Deposit | 0% | No deposit fees |
| Standard withdrawal | 0% | |
| Utility NFT (node registration) | Free | Minted onchain by the protocol, no mint fee |
| Node third-party services | 5-10% of service revenue | 70% to Node Operator, 30% to Protocol Treasury |
| Governance proposal submission | 1,000 NODR | Refundable if the proposal passes |
| Vote delegation | 0% | Free delegation |

- The third-party services fee applies when a node provides services to external protocols. Its 70 / 30 split covers only those fees. It is distinct from the protocol revenue split below.
- Paid node sale packages (Oracle $8,000 / Guardian $5,000 / Validator $2,750, Micro free) are sale package prices, not an NFT mint cost. See [Node sale](./token-distribution.md#node-sale).

## Where fees go

Planned revenue distribution: 40% to Node Operators, 35% to Treasury Reserve, 15% to Token Buybacks, 10% to Development. The node operator share is split 30/30/30/10 (Oracle / Guardian / Validator / Micro). See [Rewards](./rewards.md#revenue-split).

All fees are collected onchain and are publicly verifiable.

## Discounts and waivers (planned)

None of these exist in the fee contracts today.

- **Utility NFT holders:** 10% discount on all fees, increased with NFT tier or rarity.
- **High value users:** volume discounts for large deposits, reduced fees for long term stakers, VIP tiers for institutional users.
- **Promotional periods:** launch promotions with reduced or zero fees, seasonal campaigns, referral bonuses.

## How Noderr compares

| Protocol | Performance Fee | Management Fee | Hurdle Rate |
|----------|----------------|----------------|-------------|
| **Noderr (Conservative)** | **10%** | **0%** | **4%** |
| **Noderr (Moderate)** | **10%** | **0%** | **6%** |
| **Noderr (Aggressive)** | **15%** | **0%** | **8%** |
| Yearn Finance | 20% | 2% | No |
| Convex Finance | 17% | 0% | No |
| Beefy Finance | 4.5% | 0% | No |

## Changing fees

Today fee changes go through the 2-of-3 Safe and the 7-day timelock. Once DAO governance is active, the planned process is:

1. A proposal with the new fee structure.
2. Community discussion (7 days).
3. A governance vote across the Oracle and Guardian chambers.
4. A timelock period.
5. Automatic implementation.

Thresholds, voting weights and timelock lengths are on [Governance](../protocol/governance/README.md).

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

## Planned

- **Fee buyback and burn.** 15% of protocol revenue is allocated to NODR buybacks. No buyback or burn is live onchain yet. The share of bought back NODR that will be burned is not a fixed percentage. It will be set at protocol or DAO discretion within a range defined by governance, based on market and treasury conditions, by Noderr's adaptive (ML-governed) system together with node operator input.
- **Revenue sharing.** Direct revenue share to stakers.
- **Dynamic pricing.** AI optimized fee rates.
- **Crosschain fees.** Unified fee structure across chains.

## Next

- [Rewards](./rewards.md)
- [Supply and allocation](./token-distribution.md)
- [Noderr White Paper](../white-papers/Noderr_White_Paper_v7.1.md)