When an operator submits a deposit_strategy or withdraw_strategy transaction (i.e., when assets are rebalanced between lending protocols), we call this the rebalance crank.

A fee is collected to the fee_vault every time the operator sends a rebalance crank. This fee is paid in vault LP SPL tokens and can be seen at the fee_vault address.

Currently, we charge 5% of profit as the operation (performance) fee.

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Variables

Before rebalance:

• vault.total_amount: $t_1$
• lp_mint.total_supply: $p_1$
• Virtual price (value of LP token): $v_1 = t_1 / p_1$

After rebalance:

• vault.total_amount: $t_2$
• lp_mint.total_supply: $p_1$
• Virtual price: $v_2 = t_2 / p_1$

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Fee Calculation

We charge an operation fee:

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Adjusting Virtual Price After Fee

After deducting the fee, the virtual price becomes:

However, the vault does not send tokens directly to the treasury token account (since it may not have enough liquidity). Instead, the vault mints additional LP tokens for the fee_vault.

Let $\delta$ be the number of new LP tokens minted for the fee. The new virtual price is:

We want the virtual price after fee to remain the same, so set $v_{21} = v_{22}$:

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Solving for $\delta$

Rearranging the equation above, we get:

Or, substituting $fee = 0.05 \times (t_2 - t_1)$:

Which simplifies to:

Summary:

• The operation fee is 5% of the profit from each rebalance crank.
• The fee is paid by minting new LP tokens to the fee_vault, not by transferring underlying assets.
• The number of LP tokens minted is calculated to ensure the virtual price for LP holders remains consistent after the fee is taken.