Astra DAO provides flexibility for investors to enter or leave the index at any time they want. At the time of exit, a 2% early exit fee will be deducted to maintain system stability if the user has not held their tokens for six months. After six months of consecutive holding, the exit fee is equal to zero.
The Astra DAO Index currently has three types of fees.
Performance fee - Performance fees are collected automatically upon iToken redemption if the investor's ROI is above 0.
Each deposit made by the investor is tracked separately to detect any profit made by that specific deposit. In other words, if the investor bought additional iTokens after their first deposit, their value is not included in the ROI calculation.
If an investor withdraws only a portion of iTokens held, performance fees will be adjusted automatically to the ratio of tokens withdrawn to total tokens held.
The performance fee is currently fixed at 20% of the individual investor’s profit but can be adjusted by the DAO governance vote.
Future versions of the product might give index/pool creators the possibility to define custom performance fees in the 5% to 20% range.
Early exit fee - The early exit fee prevents/discourages investors from redeeming index participation units shortly after buying them. This is an undesirable behavior, usually indicative of panic selling, green candle hunting, pump, dump, and other generally unfavorable actions.
The early exit fee is designed to be high at the beginning (2%) and gradually decrease (1/182 of the initial fee daily). After six months of consecutive participation units holding, the exit fee is equal to zero.
Users can exempt themselves from early exit fees by converting them to an ASTRADAO token deposit with six months lockup.
If a User deposits 100 USDC into the iToken staking vault and on withdrawal, iTokens are worth 200 USDC. The User has made a profit of 100 USDC.
If 20% performance fees are applicable: The user gets 180 USDC. 80% of the performance fees will be sent to pool creators, 16% will be distributed among stakers, and 4% sent to the treasury.
If 2% early exit fees are applicable: 2% will be deducted from the user's 180 USDC and 80% of the early exit fees will be sent to pool creators and 16% will be distributed among stakers, and 4% sent to the treasury.
The User has an option of staking to gain higher rewards instead of paying early fees. After the fee deduction, the user can claim his remaining USDC or stake to earn a premium bonus.