How are performance fees calculated?

How are performance fees calculated?

When our bots make successful trades and your wallet balance is on profit, we charge a fee based on the profits you've earned. This fee is called a performance fee, and it's calculated using a pricing model called "based on a high watermark". The model is designed to prevent you from paying fees when investments are underperforming. The performance fee percentage varies depending on the strategy, but it's usually 15%.

Here's how it works:

Your high watermark is determined by the value of the strategy at the time you joined Diamond Pigs and activated your "portfolio management" button. If you have added funds to your wallet in the meantime, we calculate a "weighted average." For those who joined in 2021, the high watermark is based on the values as of January 1st, 2022.

If your wallet is currently at a loss, you will only be charged a performance fee when the value of your selected strategy exceeds your starting level again. Once the performance fee has been established, a new high watermark is set, ensuring that you never pay multiple times for the same profit.

We calculate the performance fee every month when we prepare the invoice for the monthly fees, unless you have withdrawn crypto from your wallet in the meantime (the calculation is then based on any realized profit).

Changing your strategy doesn't affect your high watermark if you're still at a loss, even if you switch between strategies without a performance fee. However, if you're making a profit, it works differently: In that case we calculate the performance fee on the share of the profit that you realised on that strategy at the time of adjustment.

Please note: The performance fee is based on the profit of the selected strategy, not the overall performance of your wallet. Your wallet's performance may be slightly different because we execute trades in each wallet independently, and there may be variations in trade prices due to the trading "spread." We keep track of the spread for each coin and consider the average spread when calculating strategy performance.

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