Proposal for Automated Vault Protocol Parameters/Fees Adjustments

The current AV charges:
15% AV Farming Performance Fee
15% AV ALPACA Rewards Performance Fee
2% AV Management Fee
0.2% Withdrawal Fee.

Note that these fees are charged regardless users make profits or not. Unlike other similar products such as Aperture Finance’s AV products, a flat 5% fee is charged from users’ actual profit upon withdrawal.

Given the high fees and current market conditions a lot of users including myself have lost money in the AVs so I propose to change the fee structure.

Option 1.
Change AV Farming Performance Fee from 15% to 5%
Change AV ALPACA Rewards Performance Fee from 15% to 5%

Option 2.
Users pay the above fees from their actual profits when exit the vaults.

Current AV Parameters:


the concept was to make money in any market, but if people incur losses in AV, then the commissions should be reviewed, this does not correspond to the advertising statement and, in general, is not fair to customers.

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Why didn’t anyone from the team respond? and discuss only those topics that are of interest to the team? It seems to me that this is the most important topic now, because it was the main feature of the project, and as a result, people lose money, this is not acceptable!

That’s understandable, people respond messages that they are interested in or in their best interest. It’s probably not going to pass when it comes to vote given that half of the charged fee go back to alpaca holders as either reward or buyback…

In my opinion the fees are a lot higher than they need to be. Sure the vaults have dev costs associated with them. However isn’t the whole point of the product is that it’s automated? If it requires so much dev attention we might as well rebalance manually. Manual rebalancing IS profitable currently in other leveraged yield farming products.

If the backtest is any accurate, we have not reached the maximum drawdown yet. I guess time will tell if it’s a good product or not.

I don’t have much to say. You can post proposals here and it’s ultimately up to the community on whether there is enough interest in it, not the team.

As far as losses not being acceptable, in periods of huge market turbulence, all products have at least some small losses or increased risk. For example, Anchor and Celsius and many protocols on Terra, many of which were lending protocols and purported to be “risk-free,” completely collapsed. Changing the commissions aren’t going to change that. Having said that, ALPACA holders can always propose to change parameters.

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isn’t the whole point of the product is that it’s automated? If it requires so much dev attention we might as well rebalance manually.

It’s like saying, “Isn’t the whole point of this rocket ship that it’s a complicated machine with AI? If it requires so much attention from NASA engineers, we might as well build a ladder to the moon.” jk :smile: You can try it manually but don’t expect to control the risk as well as 24/7 bots, which are the reason you can get higher leverage and no liquidation in the first place.

From an engineering standpoint, performance usually requires more complexity, which in turn requires more maintenance and monitoring, because there are more moving parts and a small error can cause bigger problems and be harder to find in a more complex system. We also have to continually monitor pool liquidity, prices, re-evaluate risk and ideal rebalancing thresholds from time to time. We’re also working on reducing the costs of rebalancing, thinking about what a V2 will look like, designing more types of AVs, etc. Finally, as the number of AVs increases, that linearly scales the maintenance required on them.