1. What is the performance fee?
This is a fee Peccala charges each user on each strategy they invest in, amounting to 20% of the profit we generate for them.
2. When is the performance fee taken?
The fee is charged at two different points:
The fee is charged per strategy (i.e. PECH and PECM). So if you have invested in both, there are different fee calculations for each. They may also have different fee dates, if you invested at different times.
3. How is the performance fee calculated?
The fee is calculated separately per strategy, based on two factors:
1) Your current invested balance (B) in USDT
2) The total amount invested (I) over the past 6 months, also in USDT
At the 6 month mark (based on when you first invested in this strategy), we calculate the profit you made, and therefore the 20% performance fee due, using the calculation (B - I) * 0.20 = Fee due. The figure for I is then reset to the remaining amount invested, which is known as the high water mark. This high water mark is used as the baseline to calculate the next 6 monthly fee cycle.
The same calculation applies when you make a redemption between the 6 monthly fees, with I being reduced by the % of your invested balance you are redeeming.
4. How is the performance fee deducted when I make a redemption?
When you redeem part or all of your investment, the Peccala tokens you are redeeming are burned, and the requisite amount is sent to your Peccala account in USDT.
When that happens, the USDT representing the 20% performance fee are automatically directed to Peccala, along with the other fees indicated when you make the redemption (i.e. gas and redemption fees). You receive the remaining funds.
5. How is the performance fee deducted after 6 months?
When the performance fee is due, the number of Peccala tokens equal to the fee due are deducted directly from your account, and redeemed. Instead of the USDT from the redemption being sent to your Peccala account, they are directed to Peccala.
Because your current balance in the dashboard is displayed net of performance fees, when we charge the fee you won't actually see your USDT balance change. However, the number of tokens in your wallet will drop, and the fee amount shown in the tooltip under 'Your Portfolio Balance' on your dashboard will show that no fee is due, and display the next 6 monthly due date.
6. What happens if I redeem part of my investment?
The calculation is the same as above, but the performance fee is only charged on the percentage of your investment you are redeeming.
So if you redeem half your tokens, we will charge half the overall performance fee due at that moment. The remaining amount stays invested.
7. What happens if I invest more funds into the same strategy before the 6 month fee date?
The fee is calculated based on the total invested amount in the 6 month period (I), so your additional deposits will automatically be included.
8. What happens if I redeem my entire investment?
We will deploy the same formula as above to calculate the performance fee due, and take it at the time you make the redemption.
If you reinvest in the same strategy again later, the 6 month cycle restarts from the moment you reinvest.
9. What happens if I haven't made a profit?
If no profit has been generated at the time you make a redemption, you won't pay any performance fee.
If no profit has been generated at the 6 month mark, there is also no performance fee due. And because I is not changed, there is no new high water mark. Instead, the high water mark from the previous 6 monthly cycle is retained for the next fee cycle.
The performance fee in different example scenarios:
Example 1 - You invest single amount once and don’t touch it:
Example 2 - You make multiple investments into the same strategy at different times:
Example 3 - You make a partial redemption and leave some funds invested: