This page explains exactly when fees apply, what “High‑Water Mark (HWM)” means, and how fees affect your shares.
ZEIT vaults currently charge one fee only: a Performance Fee (a profit share) paid to the vault manager.
No ZEIT platform fee (currently).
The performance fee is charged only when the vault reaches a new all‑time‑high Price‑Per‑Share (PPS).
If the vault goes down and later recovers, you don’t pay again until it breaks the previous high.
Fees are paid in vault shares (the vault mints a small amount of new shares to the manager).
Think of it like this:
The manager gets a cut of new profits only—not of your deposits and not of “getting back to even.”
What fees exist today?
A performance fee is a percentage of profits—only when the vault creates new value.
Each vault has a performance fee rate (example: 20%). This rate is set by the vault manager and is shown on the vault page.
When is it checked?
Fees are evaluated at fee checkpoints called Rolls (typically around ~24h, depending on vault design).
At each Roll, ZEIT:
computes the vault’s PPS, and
compares it to the High‑Water Mark (HWM).
The 3 definitions you need
PPS (Price Per Share)
PPS is the value of one vault share:
PPS = NAV ÷ total shares
Where NAV is the vault’s total fair value at the Roll.
HWM (High‑Water Mark)
The HWM is the highest PPS the vault has ever reached at a fee checkpoint.
In simple terms:
HWM = the last “peak” PPS you’ve already paid performance fees on.
The percent of new profits above the HWM paid to the manager (e.g., 20%).
The rule (super simple)
At each Roll:
If PPS ≤ HWM → no performance fee
If PPS > HWM → performance fee applies only to the slice above the HWM
In formula form:
Profit above HWM (per share) = max(PPS − HWM, 0)
Fee (per share) = fee_rate × max(PPS − HWM, 0)
After the Roll is finalized, the vault updates the HWM to the latest checkpoint PPS.
Example 1 — New high → fee applies only to the “new” part
Only the gain above 1.20 is counted:
Profit above HWM = 1.25 − 1.20 = 0.05
Fee per share = 20% × 0.05 = 0.01
✅ The manager fee is 0.01 per share
✅ You keep the remaining 0.04 per share of that new gain
✅ No fee is charged on anything below 1.20
Example 2 — Down → recover → still no fee until a new high
Timeline:
PPS drops to 1.00 → no fee
PPS recovers to 1.20 → still no fee
PPS rises to 1.22 → fee applies only to 1.20 → 1.22
Calculation at 1.22:
Profit above HWM = 1.22 − 1.20 = 0.02
Fee per share = 20% × 0.02 = 0.004
✅ Manager is not paid for recovery back to 1.20
✅ Manager is paid only for new highs above 1.20
How fees are paid: in vault shares (not cash)
When a performance fee is due, ZEIT pays it by minting new vault shares to the manager.
What that means for you:
You keep the same number of shares.
Total shares increase slightly (because the manager receives newly minted shares).
Your percentage ownership of the vault decreases slightly.
Why ZEIT pays fees in shares
Paying in shares:
keeps the manager aligned (they hold the same vault token and share upside/downside),
avoids forcing the vault to sell positions just to pay a cash fee,
keeps accounting clean and visible through PPS + share supply changes.
“Fair PPS” at fee checkpoints
Some underlying markets can be thin. A “paper price” (like a mid-price) can overstate what a vault could actually exit for at size.
For Rolls (including fee checkpoints), ZEIT uses liquidity-aware valuation:
PPS is based on what the vault could reasonably realize—not an optimistic mark that can’t be executed.
This is intended to:
avoid charging fees on “fake” gains,
make fees fair across all holders,
What you should look at on the vault page
Before depositing, check:
Performance Fee rate (HWM) (e.g., “20%”)
Last Roll time (the last fee checkpoint)
Do I pay fees when the vault is down?
No. If PPS is below the HWM, no performance fee is charged.
Do I pay fees again when the vault just recovers?
No. Recovering back to the old HWM does not trigger fees. Fees resume only on new highs.
Is this a fee on my deposit?
No. Performance fees apply only to profits above the HWM, not deposits.
How do fees show up in practice?
Fees show up as a small dilution event at a Roll when a new high is reached (manager receives minted shares). The vault’s accounting reflects this.
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