# \[Proposal\] Change 5% Harvesting Fee to Performance Fee on Profits **URL:** \ **Category:** Vaults\ **Created:** [3 September 2020 09:07 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613 "2020-09-03T09:07:13Z")\ **Posts on this page:** 20\ **Page:** 5
**Author:** ![Dark](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dark/32/307_2.png) [@Dark](https://gov.yearn.fi/u/Dark)\ **Post date:** [5 September 2020 00:34 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/81 "2020-09-05T00:34:22Z")
Where is the 1% or lower option? does this include or exclude gas? I vote for gas fees paid + 0.5% on profits ---
**Author:** ![LapisLime](https://avatars.discourse-cdn.com/v4/letter/l/91b2a8/32.png) [@LapisLime](https://gov.yearn.fi/u/LapisLime)\ **Post date:** [5 September 2020 02:05 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/82 "2020-09-05T02:05:02Z")
And an exit fee or not? ---
**Author:** ![thegismar](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/thegismar/32/664_2.png) [@thegismar](https://gov.yearn.fi/u/thegismar)\ **Post date:** [5 September 2020 06:55 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/83 "2020-09-05T06:55:58Z")
Exit fee is ok imo. Because it is a cost for the strategy to pay gas for an individuals funds if they are to be separated and taken out of the Strategy. (maybe keep the '‘random’ buffer) so as not to artificially force this cost. ---
**Author:** ![LapisLime](https://avatars.discourse-cdn.com/v4/letter/l/91b2a8/32.png) [@LapisLime](https://gov.yearn.fi/u/LapisLime)\ **Post date:** [5 September 2020 13:34 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/84 "2020-09-05T13:34:47Z")
Is the exit fee supposed to cover gas costs? Even if it is, fewer fees to the user may be easier ro understand and there are some other ideas about how to pay for gas. ---
**Author:** ![uhmpeps](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/uhmpeps/32/844_2.png) [@uhmpeps](https://gov.yearn.fi/u/uhmpeps)\ **Post date:** [5 September 2020 18:12 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/85 "2020-09-05T18:12:10Z")
It could be a full 5% or even 2.5% fee on every harvest. This is what FARM does (5%), they are becoming popular, and this looks totally reasonable and ok to me when the team doesn’t behave like a bunch of douche nuggets". I stuck a bit of capital in there and when I thought about it, I actually feel better about paying 5% per harvest, than I do about paying 0.5% withdrawal fee. Isn’t that strange? Governance would make a ton more, and users would feel happier? Something in here. Have to admit I still don’t understand what gas subsidization is. Just say we charge 5% on harvests if that’s what it means, simple. ---
**Author:** ![urizenus](https://avatars.discourse-cdn.com/v4/letter/u/c68b51/32.png) [@urizenus](https://gov.yearn.fi/u/urizenus)\ **Post date:** [5 September 2020 18:48 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/86 "2020-09-05T18:48:02Z")
Is it supposed to be somehow obvious where the fees will go? It may be obvious to us today that they are going wherever they are going now, but I would really like a YIP like this to explicitly state the destination of the funds. ---
**Author:** ![Dankmonty](https://avatars.discourse-cdn.com/v4/letter/d/7ea924/32.png) [@Dankmonty](https://gov.yearn.fi/u/Dankmonty)\ **Post date:** [5 September 2020 19:03 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/87 "2020-09-05T19:03:46Z")
They go to governance stakers (assuming the 500k treasury vault is full) ---
**Author:** ![daftblazer](https://avatars.discourse-cdn.com/v4/letter/d/f9ae1b/32.png) [@daftblazer](https://gov.yearn.fi/u/daftblazer)\ **Post date:** [5 September 2020 19:17 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/88 "2020-09-05T19:17:17Z")
What if instead of a Performance Fee, there was just a flat Deposit fee of 0.5% So if someone deposited Dai to the yDai Vault, 0.5% of the yDai goes to YFI Stakers. It would be similar to a Performance Fee but with YFI Stakers to having to carry some of the risk of their own products ---
**Author:** ![uhmpeps](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/uhmpeps/32/844_2.png) [@uhmpeps](https://gov.yearn.fi/u/uhmpeps)\ **Post date:** [5 September 2020 19:31 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/89 "2020-09-05T19:31:07Z")
Absolutely not. We are not trying to reduce fees here. We are trying to find a fair fee for the results generated. 0.5% on deposit is like the worst of all worlds for many reasons ---
**Author:** ![daftblazer](https://avatars.discourse-cdn.com/v4/letter/d/f9ae1b/32.png) [@daftblazer](https://gov.yearn.fi/u/daftblazer)\ **Post date:** [5 September 2020 19:46 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/90 "2020-09-05T19:46:39Z")
Or maybe a variable performance fee between 1% - 5% based on results/profit? ---
**Author:** ![Dankmonty](https://avatars.discourse-cdn.com/v4/letter/d/7ea924/32.png) [@Dankmonty](https://gov.yearn.fi/u/Dankmonty)\ **Post date:** [5 September 2020 20:10 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/91 "2020-09-05T20:10:56Z")
After reading some of your guys’ points, I changed my mind and am against adding a deposit/management fee. I think YFI stakers charging users for gas+5% performance fee is enough and will strike a healthy balance between profit and retention. ---
**Author:** ![urizenus](https://avatars.discourse-cdn.com/v4/letter/u/c68b51/32.png) [@urizenus](https://gov.yearn.fi/u/urizenus)\ **Post date:** [5 September 2020 20:41 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/92 "2020-09-05T20:41:43Z")
I assumed that was so. What I am asking is that the YIP explicitly state this. ---
**Author:** ![amazonile](https://avatars.discourse-cdn.com/v4/letter/a/ba9def/32.png) [@amazonile](https://gov.yearn.fi/u/amazonile)\ **Post date:** [5 September 2020 21:48 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/93 "2020-09-05T21:48:43Z")
After further consideration, I would vote against any performance fee - I don’t even think a 0.5 or 1% fee is required. The current YFI rewards structure is already excellent and the reward will only grow as AUM increase further. And the key to increasing those AUM is offering value, innovation and fairness to investors that they cannot find anywhere else. Fairness will attract developers who will bring the innovation, which will in turn bring the best long term value and returns for investors, and therefore, YFI stakers. ---
**Author:** ![Dark](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dark/32/307_2.png) [@Dark](https://gov.yearn.fi/u/Dark)\ **Post date:** [5 September 2020 23:48 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/94 "2020-09-05T23:48:34Z")
Actually I would like to see fees reduced for now \> \> so dont just push your agenda on everyone. ---
**Author:** ![Dark](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dark/32/307_2.png) [@Dark](https://gov.yearn.fi/u/Dark)\ **Post date:** [5 September 2020 23:49 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/95 "2020-09-05T23:49:17Z")
please include lower options why not .5% ---
**Author:** ![jjdubs](https://avatars.discourse-cdn.com/v4/letter/j/3ec8ea/32.png) [@jjdubs](https://gov.yearn.fi/u/jjdubs)\ **Post date:** [6 September 2020 00:43 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/96 "2020-09-06T00:43:35Z")
Great counterpoints, thanks for your contribution. I think it comes down to “brand” positioning. As we saw during the recent yield farming mania, there will always be opportunities for people to find higher risk and higher returns. Kimchi was offering six digit APY (…) I personally feel that the long term opportunity for the YFI brand, so to speak, is to position ourselves as THE top layer of ethereum’s financial stack. Ultimately aiming for a place where investors are confident that they can place their funds, and they are yielding the highest rewards at an acceptable level of risk. I don’t have enough conviction to comment on whether 5% will alienate a portion of our LPs, but I believe that we shouldn’t hyper-focus on appeasing the “find the biggest number” type of defi investor without sacrificing core principals. Just my .5YFI ---
**Author:** ![franklin](https://avatars.discourse-cdn.com/v4/letter/f/3e96dc/32.png) [@franklin](https://gov.yearn.fi/u/franklin)\ **Post date:** [6 September 2020 04:17 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/97 "2020-09-06T04:17:59Z")
I’m against a deposit fee. I think a core component of Yearn is the emphasis on modularity and composability within DeFi. That enables users to constantly move funds between different protocols frictionlessly and easily. There is already a withdrawal fee, which I believe is intended to cover gas costs related to unwinding the position. An additional deposit fee would constrict free-movement further. ---
**Author:** ![redarmanino](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/redarmanino/32/1817_2.png) [@redarmanino](https://gov.yearn.fi/u/redarmanino)\ **Post date:** [6 September 2020 05:20 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/98 "2020-09-06T05:20:55Z")
Measure objective rankings of a strategy: e.g. Risk-adjusted returns evaluated over a trial period. And scaled up over time to see if the strategy RaRs can justify follow-on infows. ---
**Author:** ![srs-parafi](https://avatars.discourse-cdn.com/v4/letter/s/958977/32.png) [@srs-parafi](https://gov.yearn.fi/u/srs-parafi)\ **Post date:** [6 September 2020 06:52 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/99 "2020-09-06T06:52:36Z")
Thank you everyone for your input. In the spirit of moving this discussion forward, I’ve opened a poll in the original post (top). Please vote! ---
**Author:** ![DeFi\_Noob](https://avatars.discourse-cdn.com/v4/letter/d/7ba0ec/32.png) [@DeFi\_Noob](https://gov.yearn.fi/u/DeFi_Noob)\ **Post date:** [6 September 2020 12:07 UTC](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613/100 "2020-09-06T12:07:15Z")
I would add fee differentiation based on user length of time on vault. As we are prone to being forked, we need to add strategies that would increase user stickiness. just my 0.05 YFI [Previous page](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613.md?page=4) [Next page](https://gov.yearn.fi/t/proposal-change-5-harvesting-fee-to-performance-fee-on-profits/4613.md?page=6)