We’re excited to announce the upcoming launch of Bundle fee sharing! To learn more about what this entails and how to prepare, read on.
What is Fee Sharing?
The Bundle protocol natively generates fees, as described in past articles. To recap, Bundle’s currently take an exit fee (default of 2% to prevent certain arbitrage attacks) and performance fee collected continuously over a year (also with a default of 2%).
While these are intended to be configurable via governance, the goal has always been to distribute these protocol fees to Bundle holders.
Note that the team has yet to collect any fees, as we’ve been waiting to distribute these to holders! The protocol currently has over $2k in fees collected and ready to be distributed immediately; this means that users who stake in our upcoming fee sharing vault will be getting an immediate return of $2k distributed evenly.
Fee Sharing Mechanism
Bundle’s fee-sharing mechanisms are unique to the space. Staking will operate as follows:
- Every deposit is placed on a 7 day hold before it can begin actively participating in fee collection. During this time, these funds may be withdrawn, but won’t benefit from newly collected fees.
- Immediately after this 7 day hold, a users deposit is converted to an active balance which may passively earns BDL from any fees collected.
Fee collection mechanisms operate as follows:
- Any user may call the collect function on the vault contract. Upon calling, 1.5% of collected fees are distributed to the caller and 30% of fees are distributed to the team, with the rest being distributed to the vault.
- As Bundle DAO collects fees in a variety of tokens, these are automatically converted to BDL, with users passively gaining compounded BDL on top of their initially deposited balance. Note that the vault will increase buy pressure on BDL while actively adding funds to existing liquidity pools.
How to Prepare
As previously mentioned, we have roughly 3 weeks of fees collected and ready for distribution (~$2000). These will be distributed to users who deposit to the vault on the first day of it’s launch (due to how the hold mechanisms are designed). It’s strongly advised that interested parties join the vault on day 1 as these fees will be distributed to the first batch of deposits after 1 week. Given Bundle’s current capitalization, we can anticipate a roughly 5–10% direct ROI for this initial batch of depositors.
To prepare, follow our Discord / Twitter for updates! We’ll be launching the vault in the coming few days, and will add UI support for depositors. Once we announce the full release, all you’ll need to do is approve BDL for the Vault, deposit, and wait!