Fee Splits for Cell Managers and Risk Pools

The Re Protocol ensures a transparent and equitable fee structure to incentivize all stakeholders, including Cell Managers, the protocol treasury, and participants. This approach aligns the interests of all parties, fostering a sustainable and efficient ecosystem.

Fee Allocation

1. Cell Managers:

   • Management Fees:

     • Cell Managers receive a fixed percentage of the capital allocated to their Risk Pools as compensation for their expertise and oversight.

     • These fees are designed to cover administrative costs and incentivize active, high-quality management of Risk Pools.

   • Performance Fees:

     • Additional incentives are tied to the profitability of their Risk Pools. A percentage of the net profits generated by the Risk Pool is allocated to the Cell Manager.

2. Protocol Treasury:

   • A portion of fees from each Risk Pool is directed to the protocol’s treasury to support ongoing development, operational costs, and governance.

   • This allocation ensures the protocol remains self-sustaining and can fund future initiatives.

3. Participants (reUSD / reUSDe Holders):

   • The majority of Risk Pool profits are distributed to participants holding reUSD or reUSDe tokens, proportional to their contributions to the Insurance Capital Layer (ICL).

   • This structure prioritizes participant returns while maintaining sufficient incentives for Cell Managers and the protocol treasury.

Example Fee Distribution

• Management Fee: 2% of deployed capital annually.

• Performance Fee: 10% of net profits generated by the Risk Pool.

• Participant Allocation: 88% of net profits distributed to reUSD holders.

Incentivizing High-Quality Management

By tying a significant portion of Cell Manager compensation to performance, the protocol ensures that only the most skilled and diligent managers are incentivized to participate. This aligns the success of Cell Managers with the success of the protocol and its participants.

Governance and Transparency

• Fee Adjustments:

  • As governance transitions to a DAO model, participants will have the ability to propose and vote on fee structures to ensure they remain competitive and fair.

• On-Chain Reporting:

  • All fees, distributions, and allocations are transparently recorded on-chain, allowing participants to verify the integrity of the process.

The Re Protocol’s fee structure is designed to create a balanced ecosystem that rewards expertise, funds innovation, and prioritizes participant returns. By maintaining transparency and fairness, the protocol ensures long-term trust and sustainability.