How Staking Affects your Diamond Pigs Trading
Exchange wallet types overview
Every crypto exchange offers different types of wallets, such as:
- Spot wallet,
- Staking wallet,
- Funding wallet,
- Futures wallet,
- Earn wallet and more.
Diamond Pigs can only trade with the funds that are in your Spot Wallet. If you move funds to another wallet within the exchange, our system can no longer see or manage those funds, and this might affect your Diamond Pigs portfolio management.
What happens when I move funds from my Spot Wallet?
When you transfer money from your Spot Wallet to another wallet (f.e. to Staking Wallet), Diamond Pigs system might treat this as if you’ve withdrawn the funds. This means we won’t be able to trade with these assets anymore, and your wallet balance will appear lower on Diamond Pigs dashboard.
It differs per exchange, every exchange might treat moving funds to another wallet differently.
Diamond Pigs trading and moving funds
When you move funds from your Spot Wallet to another wallet, we cannot trade these funds anymore. Our system can only manage what it sees, so once your funds are moved to a different wallet (e.g., staking, earn, or funding), trading with those funds stops.
The moment you move the funds back to your Spot Wallet, we will be able to trade it again.
Performance Fee Calculation and moving funds
Moving funds from your Spot wallet may affect youe Performance Fee calculation. We use a High Watermark Model to track your profits. When you move funds out of your Spot Wallet, our system treat it as if you would withdrawn the funds, triggering an additional “crystallization” moment.
This means our system looks at the current share price of the strategy you're using. If the current share price is lower, your HWM (High watermark) stays at the same level. And if the share price is higher, the performance fee is based on the increased value, and a new HWM is set.
When you move the funds back to your Spot Wallet, it’s treated as a new deposit. Our system also has an additional "crystallization" moment, where it checks and compares the current share price with your HWM. If the current share price is lower, the HWM does not change. If the share price is higher, the HWM resets, meaning your profits will be calculated based on the new balance, not your original one.
You can read more about it here: https://support.diamondpigs.com/portal/en/kb/articles/how-diamond-pigs-handles-performance-fee-when-you-switch-strategies
Questions?
If you have any questions about this topic, please contact our Support Team at support@diamondpigs.com
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