Basket managers on Alvara can now earn from the baskets they build. V2 fees are live on Ethereum: managers can set a management fee and a performance fee, investors can see every fee before they deposit, and every fee change comes with notice.
This is the biggest change to how Alvara baskets work since launch. Here is what it means for managers and for the people who invest in their baskets.
- 1% default management fee
- 3% management fee limit, per year
- 20% performance fee limit, of profits
- 14 days notice before any fee rise
Why fees matter
Running a good basket takes work. Managers research tokens, set weights, rebalance when markets move and answer to the people who follow them. Until now there was no built-in way to be paid for that. V2 changes this, so good managers can build a real business on Alvara and investors can back the managers they trust.
Two kinds of fee
Management fee. A yearly fee on the value of the basket, between 0% and 3%. New baskets start at 1%, and the manager can change it. It builds up in monthly periods and the manager claims it from their Manager tools.
Performance fee. A share of the profits a basket makes for you, up to 20%. It is worked out per holder: you only pay on the profit your own deposit has made, measured from the value when you came in. If your position is not up, you pay nothing. The fee is taken from the shares you withdraw. No new shares are created, so other holders are not affected.
Performance fee charging has not started yet. Managers can set their performance fee from today and investors can see it on every basket, but no performance fee is taken until charging switches on. We will announce the start date in advance. Profits made while a performance fee is set can still be charged on withdrawals after charging starts, and the app says so wherever the fee appears.
Built for investors
- Every basket shows its management and performance fee on the basket page, before you deposit.
- A manager can lower a fee at any time, and the cut applies straight away.
- Any fee rise needs 14 days' notice. You see the pending rise on the basket page and in your notices, so you have two weeks to decide whether to stay.
- Fees have hard limits written into the contracts: 3% a year for management and 20% of profits for performance. No manager can go above them.
- When you withdraw, the app shows what performance fee, if any, applies to that withdrawal.
Built for managers
- Set and change your fees from Manage fees on your basket page.
- Launching a new basket? For its first 7 days, while you are the only holder, you can set your fees straight away with no waiting period. Once someone else invests, the 14-day notice applies to any rise.
- Existing baskets can propose a fee rise today. It takes effect after the 14-day notice period.
- Claim your management fee in the basket's tokens or in ETH.
How Alvara is paid
Managers keep 90% of the fees they charge. Alvara takes 10% of performance fees, and from the next upgrade 10% of management fees too. We have also cut Alvara's platform fee: creating a basket and contributing now cost 0.25%, and withdrawing is free.
What moved over
Every live basket on Ethereum has been moved to V2. Your holdings, weights and history are unchanged. Contributing, withdrawing in kind or as ETH, and rebalancing all work as before. Migrated baskets start on a 1% management fee and a 0% performance fee until their manager decides otherwise.
What comes next
- Base moves to V2 fees next.
- We will announce the date performance fee charging starts, with notice before it does.
- We will keep improving how fees show up in the app based on what managers and investors tell us.
If you manage a basket, open it on app.alvara.xyz and look for Manage fees. If you invest, check the fees on the baskets you hold. Questions are welcome in our Telegram and Discord.
