User Question on Portfolio Protocol Fees in Lending Marketplace

1

Hi, we are a lender and would like to understand how the protocol fee is charged in the Lending Marketplace (B2B Fintech Portfolio / Perp Protocol Portfolio / Alameda Portfolio).

Is the protocol fee of 0.5% applied on the deposits, or reduced from the interest paid?

Our main concern is: is there a possibility that due to the protocol fee and insufficient interest earned during the loan tenure, we may end up with less than what we start with? For example, earned 0.3% on our lending deposits across the loan tenure, but due to the 0.5% fee charge, we end up only withdrawing 99.8% of what we lent out (which increases the risks of lending).

Also is the protocol fee applied on an annualized basis, which means that if the portfolio loan tenure is for 6 months, the fees actually is 0.25%?

We have searched through the documentation, forum and general internet, but was not able to find sufficient information provided around how this protocol fee is applied. Some help here would be greatly appreciated. Thanks!

1 Like
2

Hey @defi420, the protocol fee is on an annualized basis and is paid by the pool (i.e. lenders earn interest net of fees). A protocol fee of 0.50% per annum is sent to the protocol treasury each time a loan is deployed.

Taking the most recent Alameda portfolio loan as an example, this 5.5M USDC loan for 52 day duration sent 5.5M USDC to the borrower’s address and a protocol fee of 3,917.81 (=5,500,000 USDC * 52/365 * 0.50%) USDC to the protocol treasury (0x2a5).

Thanks for asking this question – Iv’e added this info to the FAQs in TrueFi docs here.

3 Likes