# Performance Fee

## Fee Background

The Protocol Performance fee is collected in the form of vault share token inflation. These new lov-Tokens will be minted periodically and dilutively to the Origami Treasury based on the Fee Table below. The Performance fee will be set to 2% - 10% and applied on an annualised basis depending on ***the expected yield in the vault***. The Performance fee will be updated if the eAPY has risen or fallen to the next tier over the previous month. The Performance fee Schedule may be updated through governance at any time. For the Fee Schedule applicable to a specific vault, see the [Vault Fee Schedule](/the-second-fold-v2/vault-fee-schedule.md). 

## **Performance Fee Formula**

$$
\boxed{\text{Performance Fee} = totalSupply() \* annualFeePct \* timeDeltaSinceLastCollection / 365}
$$

| eAPY Threshold | Performance Fee            | Update Frequency |
| -------------- | -------------------------- | ---------------- |
| <50%           | 2%                         | Monthly          |
| >50%           | Varies (capped to 10% max) | Monthly          |

{% hint style="info" %}
The Performance Fee accrue to the Origami Protocol Treasury and can be updated through governance.
{% endhint %}


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