Variable Deposit Fees
This page explains the one time deposit fee in more detail.
When depositing collateral into the Yeti Finance system, there is a one-time variable deposit fee dependent on the backing percent of that collateral. This fee is separate from the YUSD borrow fee. This fee is in place to limit the amount of collateral which can be borrowed based on the risk and de-incentivize too much risky collateral from backing YUSD.
This is a more market driven approach as opposed to Abracadabra's strategy of having hard caps on risky collateral types. For instance, as risky collateral starts to back more than 1% of the system, the deposit fee for that collateral quickly increases and can naturally encourage more collateral diversity.
These are some examples of collaterals and their associated fees based on risk. The fee explanation section will describe how the variable deposit fee would scale with backing percent. These fee parameters were established in collaboration with our economic auditors.
Token | Token class / risk | Fee explanation |
|---|---|---|
WAVAX | Low risk asset | Low fee throughout slowly scaling from 0.25-1% |
qiUSDC | Yield bearing stablecoin | Low fee throughout slowly scaling from 0.25-1% |
WETH | Medium-low risk asset | Low fee for first 50%, scaling up from there to higher percentages |
JOE | Medium risk asset | Low fee up to 5% backing, scaling up to significant fee amounts |
DANGER | High risk asset | Low fee up to 0.5% backing, scaling up quickly to significant fee amounts |
An example of some fee options for a medium risk asset:
Fees are calculated for each asset as Risk-Adjusted Value of Collateral * fee %, and the deposit fee is added to the trove's YUSD debt.
At launch, the one-time deposit fee will be static and not dependent on backing percent. This is to allow users to deposit more collateral into the system without the punishment of affective the backing percent. Once the system obtains a wide variety of different collateral types and amounts, the variable deposit fee will be enabled. The team will be monitoring the system and enable variable deposit fees once enough liquidity is in the protocol.
For information on what the deposit fees will be at launch, check the table below.
Token | Deposit Fee | Effective MCR |
|---|---|---|
WAVAX | 0.25% | 110% |
WETH.e | 0.25% | 110% |
WBTC.e | 0.25% | 110% |
USDC | 0.2% | 103% |
qiUSDC | 0.2% | 105% |
qiETH | 0.25% | 115% |
qiBTC | 0.25% | 115% |
qiAVAX | 0.25% | 115% |
AVAX-USDC | 0.5% | 115% |
WETH.e-AVAX | 0.5% | 115% |
av3CRV | 0.3% | 110% |
Last modified 1yr ago