Rebalancing with Fees

Vaultka will implement additional withdrawal fees if the ratio of GM tokens deviates from the target ratio after a redemption. Fees are applicable only to GM redemptions, excluding USDC transactions, as USDC withdrawals will automatically be spreade among each pool based on their weight.

Fees will be applied exponentially, with a minimum fee of 0.01% whenever deviation occurs. This approach ensures that greater deviations from the target ratio incur exponential fees, discouraging large discrepancies in pool ratios.

Fees=(0.02βˆ—y2+0.0005βˆ—y+0.0001)βˆ—0.001βˆ—100000\small Fees = (0.02* y^2 + 0.0005 * y +0.0001)*0.001*100000


  1. Let Percentage of Deviation from target ratio be y

  2. When deviation is 0%, fee will be 0%

External Rebalancing Mechanism

To keep user’s exposure under tight monitoring, in addition to additional fees on GM withdrawals that deviate from the target ratio, Vaultka employs an active external rebalancing mechanism through its keeper. The keeper continuously monitors the pool ratio and initiates rebalancing when specific thresholds are triggered. The rebalancing process involves selling over-weighted assets and minting under-weighted ones to align with the target ratio. The triggering thresholds are as follows:

  1. When the total pool ratio of [BTC-USDC] and [ETH-USDC] falls below 70%.

  2. When the ratio of [BTC-USDC] and [ETH-USDC] pool is below 0.3 or above 0.7.

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