Concrete × EtherFi — Fee Structure
Master Services Agreement — Visual Breakdown
Asset Flow & Deployment Chain
End Users (via EtherFi)
Deposit weETH into the vault through EtherFi's platform. Receive VRTs (Vault Receipt Tokens) representing their share of NAV.
weETH deposited
Concrete Vault (weETH Vault)
Holds digital assets. NAV calculated daily. Custodied by a third-party Custodian (not Concrete). Assets pledged as collateral for stablecoin loans.
weETH used as collateral → stablecoins borrowed
Concrete (Strategy Manager)
Borrows stablecoins against the weETH collateral. Deploys stablecoins to approved DeFi protocols. Bears Borrowing Obligations (loan interest). Manages rebalancing, risk, and venue selection at sole discretion.
Stablecoins deployed for yield
DeFi Protocols (Third Party Deployment Venues)
Lending, borrowing, liquidity, and money market protocols approved by Concrete. Generate yield (or losses) that flow back to the vault NAV.
Fee Calculation — Step by Step
1
Measure NAV
Daily, net of borrowing costs
NAV = Total Assets in Vault − Accrued Borrowing Obligations
Updated every 24 hours. Deposits/withdrawals during a period are treated as if they occurred at the start. Fee deductions are applied at the end.
2
Vault Return
Net P&L for the period
Vault Return = Δ NAV (adjusted for deposits, withdrawals, fees)
Can be positive or negative. This is the total value created or destroyed by the vault during the Calculation Period.
3
Maximum APR Amount
Cap on what users can earn
Max APR Amount = (Vault APR [6.3%] − Staking Rate) × NAVstart
÷ 12 (for monthly periods), prorated for time deposited
÷ 12 (for monthly periods), prorated for time deposited
The "extra" yield above staking that end users are promised. Currently the spread is 6.3% minus prevailing weETH staking APY.
4
Decision Point
How much did the vault actually earn?
IF Vault Return ≥ Max APR Amount
→ Vault APR Accrual = Max APR Amount ✓
→ Platform Fee = Vault Return − Max APR Amount
IF 0 < Vault Return < Max APR Amount
→ Vault APR Accrual = Vault Return (all of it)
→ Platform Fee = $0
IF Vault Return ≤ 0
→ Vault APR Accrual = $0
→ Platform Fee = $0
→ Loss reduces NAV (borne by end users)
→ Vault APR Accrual = Max APR Amount ✓
→ Platform Fee = Vault Return − Max APR Amount
IF 0 < Vault Return < Max APR Amount
→ Vault APR Accrual = Vault Return (all of it)
→ Platform Fee = $0
IF Vault Return ≤ 0
→ Vault APR Accrual = $0
→ Platform Fee = $0
→ Loss reduces NAV (borne by end users)
5
Distribute
Who gets what
→ End Users: Vault APR Accrual is retained in vault (compounds). Paid out on withdrawal.
→ Concrete: Platform Fee is accrued and retained by Concrete. Out of this, Concrete pays all Vault Expenses (custody, curator, deployment fees).
→ Gas/Network Fees: Socialized across all end users. Concrete not liable.
Payment Flow — Who Pays Whom
Worked Examples — $100M Vault, 6.3% APR, 3.5% Staking Rate
Monthly Maximum APR Amount: (6.3% − 3.5%) × $100M ÷ 12 ≈ $233,333
Strong Month
Vault Return: +$500,000
End Users (APR Accrual)
+$233,333
Concrete (Platform Fee)
+$266,667
Vault Expenses (from Concrete)
−varies
Concrete keeps 53% of returns, users get 47%
Weak Month
Vault Return: +$150,000
End Users (APR Accrual)
+$150,000
Concrete (Platform Fee)
$0
Vault Expenses (from Concrete)
−out of pocket
Users get all returns; Concrete pays expenses from its own funds
Loss Month
Vault Return: −$200,000
End Users (APR Accrual)
$0
Concrete (Platform Fee)
$0
Loss borne by
End Users (−$200K)
End users absorb 100% of the loss via NAV decline. No high-water mark.
Risk Exposure Summary
Very High
Collateral Liquidation
Exposed: End Users — weETH collateral can be seized by lending protocols in a price crash
Very High
Liability Cap vs. Assets at Risk
Exposed: EtherFi / End Users — Concrete's max liability is 12 months of fees (potentially tiny vs. $100M+ vault)
High
100% Downside to End Users
Exposed: End Users — no loss-sharing, no high-water mark, no fee clawback from Concrete
High
Sole Discretion + Broad Disclaimers
Exposed: End Users / EtherFi — Concrete controls deployment, disclaims virtually all warranties
Med-High
Uncapped Indemnity (EtherFi)
Exposed: EtherFi — unlimited liability for representations made about vaults/services (Section 7.3)
Med-High
Withdrawal Gates & Liquidity
Exposed: End Users — 7-day notice, volume limits, gates, and suspension events in a crisis
Medium
Asymmetric Exclusivity
Exposed: EtherFi — locked into Concrete exclusively; Concrete can serve competitors freely
Medium
No High-Water Mark
Exposed: End Users — Concrete profits from volatility with no fee recapture after losses
End Users / EtherFi
Concrete
Vault (shared infrastructure)
DeFi Protocols / Positive Outcome
Loss / Negative Outcome