As part of the ongoing development of Lido V3: Ethereum Staking Infrastructure, Lido contributors are sharing a preliminary view of the stVaults fees approach.
This post outlines the proposed approach to fees in stVaults, which are designed to support diverse staking strategies across DeFi, institutional staking, and delegated staking segments. We identified three main fee types: Infrastructure, Reservation liquidity, and Liquidity. These fees enable the protocol to balance incentives between users, Node Operators, and Lido Core stability.
This is still WIP and we’re publishing this early to provide context ahead of launch and to gather community feedback on the proposed setup.
stVaults Fees Approach
We decomposed stVaults into 2.5 separate parts: Trustless staking intermediate and Lending market with a Market Maker. Then gather different fee types presented on the market and came up with the following taxonomy:
Proposed fee structure
We’ve considered various options and narrowed it down to three. stVaults will charge 3 fee components: Infrastructure fee, Reservation liquidity fee (Mintable stETH fee) and Liquidity fee (fee on minted stETH). Also users should take into account minted stETH rebase.
Infrastructure fee = Total_value * Lido_Core_APR * Infrastructure_fee_percentage
Reservation liquidity fee = Mintable_stETH * Lido_Core_APR * Reservation_liquidity_fee_percentage
Liquidity fee = Minted_stETH * Lido_Core_APR * Liquidity_fee_percentage,
Where Infrastructure_fee_percentage, Reservation_liquidity_fee_percentage and Liquidity_fee_percentage - percentages set up by DAO. Please note that stETH_APR = 0.9 * Lido_Core_APR
Fee structure at launch
Market segments
There are 3 main market segments which DAO wants to address with stVaults:
| Market segment | Preferences | Possible fee setup |
|---|---|---|
| DeFi strategies (leverage staking, staking + any strategy using stETH on top of it) | Maximum demand for stETH (as low RR as possible) | Almost all fee setups are possible because all features are used: infra, liquidity supply and stETH |
| Institutional stakers | Low stETH demand, RR of 90% is good enough | - High Infrastructure fee - Low or even zero Liquidity fee and/or Reservation liquidity fee |
| Delegated staking | Low stETH demand | - Medium/Low Infrastructure fee - Potential stETH usage in future with Liquidity fees |
Fee basis approaches
- To calculate fees using following fee basis (‘total volumes”): Total Value, Mintable stETH, Minted stETH
- To calculate fees using “instant residual volume”, e.g:
- Infrastructure fee is charged only on the part of ETH within the Vault with no Minted / Mintable STETH against it. (Total Value 100ETH, 60 stETH is minted → we use 40 ETH as a basis for Infrastructure fee)
- Reservation liquidity fee is charged only on the residual mintable stETH (mintable stETH is 90stETH, minted stETH is 60stETH → we use 30 stETH as a basis)Liquidity fee is charged using the same basis is in first option - Minted stETH (60stETH)
Possible fee structures at launch
Option 1 - Flat fee
X% Infrastructure_fee
Option 2 - Combination of all 3 fees
X% Infrastructure_fee + Y% Reservation_Liquidity_fee + Z% Liquidity_fee
Option 3 - Combination of Infrastructure and Liquidity fees
X% Infrastructure_fee + Y% Liquidity_fee