Fees
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The coupon fee reduces COUPON’s gross payment. SHIELD funds the gross coupons and the notional fee; keeper rewards come from accrued protocol fees.
Schedule
fact Coupon and notional fee rates are snapshotted into each series at creation. Read couponFeeBps and notionalFeeBps from that series rather than treating example rates as defaults.
| Fee | Rule | Timing |
|---|---|---|
| Coupon fee | Gross coupon multiplied by the series fee rate, rounded up | Each paid observation |
| Notional fee | Matched notional multiplied by the series fee rate, rounded up | Deducted from SHIELD prefund at strike |
| Keeper reward | The effective configured reward, limited to available accrued fees | Successful strike or executed observation |
Where Fees Go
fact Fee Accounting
Keeper rewards are credited for later withdrawal. The reserve retains fees needed for outstanding cranks; after a terminal outcome, remaining sweepable fees can go to the fee sink. The router’s configured split determines its buyback and Treasury allocations.
Worked Numbers
illustrative These are the worked-example assumptions: 100,000 USDG of notional, a 45 bps coupon, twelve possible coupon observations, a 25% coupon fee, a 75 bps notional fee and 2.00 USDG per executed crank including strike.
| Scenario | Coupon Fees, USDG | Notional Fee, USDG | Keeper Payments, USDG | Net Protocol Fees, USDG |
|---|---|---|---|---|
| A: Autocall at 3 | 337.50 | 750.00 | 8.00 | 1,079.50 |
| B: Cash Maturity | 1,350.00 | 750.00 | 26.00 | 2,074.00 |
| C: Physical Maturity | 1,012.50 | 750.00 | 26.00 | 1,736.50 |
Scenario C has nine paid coupons but twelve executed observations after strike. Missed coupons do not remove those executed observations from the keeper calculation.
Effective Cost to Each Side
- illustrative A 0.45% gross coupon becomes 0.3375% net after the assumed 25% coupon fee: 450.00 USDG gross, 112.50 USDG fee and 337.50 USDG net per paid observation.
- SHIELD pays the gross coupons and the notional fee, not just COUPON’s net receipts.
- No coupon fee accrues on an observation with no coupon payment.
Protocol Revenue Is Not Principal
fact accruedFees is separate from principal, coupon pools and refundable deposits. The escrow invariant keeps these accounting buckets distinct. Desk positions and Treasury reserves are outside the note core’s fee bucket.
Reading Fee Totals
A fee total describes executed activity under stated series terms. It does not predict future subscriptions, coupons, autocalls or token rewards.
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