In this proposal I try to justify the required changes to vault performance fee, so that it will be more justly for investors in delegated vaults, also to have more strategies.
Currently vault performance fee is 20% [1, 2], 10 percent for vault and 10 percent for the strategist. For delegated vaults which transfer capital from one vault to another this fee will be charged at least twice for the same capital, once in the originating vault and once in the destination vault (for delegated vaults in more than 2 tiers, the situation will be worse). I think this behavior is not desirable and should be corrected since the fees are being charged for the same yield more than once, although some operations are done for transferring the capital (like depositing some token and borrowing another one ).
In the current proposal voting will just be done for vault performance fee, although I will describe my opinion for strategists performance fee, I will defer voting to another proposal after this one passes, since that part may be more controversial.
I think current fee structure for delegated vaults is not appropriate because the investor will pay fees multiple times on the same yield (s)he has collected.
The other problem is that by the current fee structure, some delegate strategies specifically in long delegation chains may become impractical because of high fees.
The logic for supporting not taking the fees more than once, is similar to the practice of preventing double taxation of parent companies on the profits of their subsidiaries.
The performance fee for the vault, could be made configurable for each strategy, and the global vault performance fee removed. By doing so, each strategy will have two performance fees, one that goes to the strategist and the other which goes to the vault. For delegated vaults we can set the vault fee for the strategy to zero in the source strategy and collect it in the destination strategy once (The last strategy doing the actual work).
This second item is not the subject of voting for the current proposal (probably some future one[s]), I have described it here because it is correlated and for completeness.
The performance fee for the strategist may be a little more complicated (For strategy A delegating the yield generation job to strategy B in another vault, which strategy should get what? Should they get equal portions of 10%? Is any of them more important than the other? What would be the situation if delegation path has more than 2 strategies?). Currently each strategist gets 10 percent of the yield his/her strategy has generated for its vault; Dividing this 10 percent between 2 or more strategists may be challenging (if agreed upon to have a division in further proposal(s), otherwise each strategist may take his/her 10 percent like before).
The following method for dividing the performance fee between strategists comes to my mind: For each chain of strategies, an investment line will be defined. For example vault A has a strategy A1 which invests in vault B with some strategies including strategy B1 which invests in vault C with a strategy C1 which actually generates the yield. The yields generated in vault C may belong to some number of investment lines one of them being (A1, B1, C1) another one will be (C1) for direct investment in vault C, another line will be (B1 , C1) for investment in vault B. The strategist performance fee belonging to each investment line generated by the last strategy will be divided according to an agreed upon ratio between strategies, for example for (A1, B1, C1) each one may get 3.33% (one third of 10%), and the yield will be passed untouched during the path from C to B to A (nobody will take fees in between, strategists will take their fees from the last strategy in the line).
I may be beneficiary to this proposal (for what I call improved performance) in future as a strategist by proposing some delegated vaults strategies.
For: The vault performance fee should be moved from vault to strategy and made 0 for delegating strategies.
Against: The performance fee should remain as is.