TraFi is blighted by hidden costs and management fees, and sadly multiple DeFi aggregators are following the same path ⚠️
1% management fee
== 10% perf fee on 10% APY
== cancels out your auto-compound benefits and exposes you to third party SC risks
Food for thought, right?
Make sure to have a look at fees before your next vault approval:
- Only agree to pay >10% perf fee for long tail/volatile assets auto-compounders or high-value, structured DeFi strategies that suit your risk-reward appetite.
- Watch out for entry/exit fees >.2% (consider it a steal when entry+exit fees are worth more than 5 days worth of yield)
- Avoid protocols charging fixed management fees regardless of perf. Protocols should be accountable for their strategies losses (often hiding behind alt. names such as @sommfinance's "Platform Fee").
Following @yearnfi's lead, we chose to null out management fees from protocol inception.
Stay safe and aware of hidden costs, anon 💫
JakeTheSlug@jake_the_slug
For DeFi to reach “capital efficiency” and participants to best align, fees should all be adaptive. Yield protocols should favor perf over management fees, DEXs swap fees should be volatility based, and liquidation fees to decrease with volumes. Thanks @eulerfinance
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