Commission Sharing Description
I. Overview
➢ Commission sharing setting is one of the core features of the DESYN protocol, which is currently mainly piloted in Closed-End products.
➢ Reasonable product income distribution will greatly help the fundraising process of products.
➢ This is a very interesting pilot project! You are welcome to try it out and give your feedback.
II. Type of Income distribution
Closed-end asset management products can create four types of income.
Depending on the portfolio manager's needs and understanding of the market, he or she can allocate a portion of each type of income to incentivize fundraising partners who contribute to the product (mainly refers to institutions and individuals that provide support for product fundraising).
➢ Issuance fee
The commission of the Issuance fee shall be calculated upon the completion of the fundraising for the asset management product and shall be paid to the personal vault of the fundraising partner, which can be claimed at any time.
➢ Redemption fee
The commission of the redemption fee shall be calculated upon the completion of the redemption process of the asset management product and shall be paid to the personal vault of the fundraising partner, which can be claimed at any time.
➢ Management fee
The commission of the Management Fee is calculated on a daily basis and shall be paid to the personal vault of the fundraising partner once a month when the owner withdraws it, which can be claimed at any time.
➢ Performance Fee
The commission of the performance fee shall be calculated upon the completion of the operation period of the asset management product and shall be paid to the personal vault of the fundraising partner when the owner withdraws it, which can be claimed at any time.
III. Income distribution rules
3.1 Overview of rules
○ The commission-sharing mechanism works based on the principle of "commission sharing starts upon forwarding".
○ Each product introduction page has a sharing button, and the link address of the product page shared each time by the fundraising partner, is exclusive to the promoter.
○ As long as an investor makes a transaction on this page, it will be recorded by the system
3.2 Sequence of income distribution
➢ Desyn platform: A fixed proportion will be set aside by the DESYN Platform for the development of the Platform.
➢ Fundraising partner: fundraising partner, who helps fundraising can get a sales commission set by the portfolio manager.
➢ Portfolio Manager: All the remaining income belongs to the portfolio manager, who can redistribute it.
3.3 Influencing Factors
Once the portfolio manager completes the set of fee allocation percentages, the amount of commission received by each fundraising partner will be determined by two factors:
1. Level: the amount of funds raised by a fundraising partner.
In closed-end asset management products, smart contracts will count the amount raised by all fundraising partners after the fundraising period ends.
2. Sharing Proportion Based on the Amount of Raised Funds
Then, according to the range of the raised amount, determine the proportion of income that the fundraising partner should receive.
Lastly, the commission for each fundraising partner will be determined according to the ratio of the amount raised to the total size, and the corresponding sharing ratio.
The commission will be issued to the fundraising partners' commission vault and can be withdrawn at any time.
IV. Examples
4.1 Basic Assumptions
The portfolio manager will set the allocation ratio of four categories of fees (issuance fee, redemption fee, management fee, and Performance Fee) according to the needs of product operation.
Upon expanding the display window we see, currently, DeSyn supports up to four levels for each type of fee.
Assuming that the portfolio manager Luke issues asset management products, settings are as follows
➢ Total fundraising amount at the end of the period: 1 million USDT
➢ Start and end date of fundraising: October 1, 2022 to November 1, 2022
➢ Platform service fee: 20%
➢ The rates are as follows
| Fee | Percentage |
|---|---|
Issuance fee | 1% |
Redemption fee | 1% |
Management fee | 2% |
Performance Fee | 30% |
➢ The level settings are as follows:
| Level | Fundraising amount | Issuance Fee | Redemption Fee | Management Fee | Performance Fee |
|---|---|---|---|---|---|
S1（Beginner） | 0.00~250,000 | 20% | 20% | 5% | 1% |
S2（Mid） | 250,000~500,000 | 40% | 40% | 10% | 2% |
S3（High） | 500,000~750,000 | 60% | 60% | 20% | 3% |
S4（Expert） | above750,000 | 100% | 100% | 30% | 5% |
➢ A total of 3 fundraising partners contributed to the $1M fundraising, assuming:
| Name | Fundraising amount | Level |
|---|---|---|
Jack | 100 000 | S1 |
Lily | 300 000 | S2 |
Joy | 600 000 | S3 |
Then Jack belongs to S1, Lily belongs to S2, Joy belongs to S3
4.2 Cases of Issue Fee Commission Sharing
➢ Jack's issuance fee commission sharing
● The total issuance fee brought by Jack is 100,000*1%=1000 USDT.
● After deducting 20% of the platform, the actual allocation would be 1000*80%=800 USTD.
● Because it belongs to the S1 level, can get 20% of the issue fee
● 800*20%=160U, Jack can withdraw the proceeds after this transaction is completed.
➢ Lily's issuance fee commission sharing
● The issuance fee brought by Lily is 300,000*1%=3000 USDT
● After deducting 20% of the platform, the actual allocation would be 3000*80%=2400 USDT
● Because it belongs to the S2 level, can get 40% of the issue fee
● 2400*40%=960U, Lily can withdraw the proceeds after the fundraising is completed.
➢ Joy's issuance fee commission sharing
● The total issuance fee brought by Joy is 600,000*1%=6000 USDT.
● After deducting 20% of the platform, the actual allocation would be 6000*80%=4800 USTD.
● Because it belongs to the S3 level, can get 60% of the issue fee
● 4800*60%=2880U, Joy can withdraw the proceeds after the fundraising is completed.
4.3 Cases of Redemption Fee Commission Sharing
● The assets at the end of the period are 2 million. The levels have already been determined at the completion of fundraising.
● The funds brought by Jack accounted for 10% of the total funds raised, Lily accounted for 30%, and Joy accounted for 60%
➢ Jack's redemption fee commission sharing
● The total redemption fee brought by Jack is 2 million*1%*10%=2000USDT.
● After deducting 20% of the platform, the actual allocation would be 2000*80%=1600USDT.
● Because it belongs to the S1 level, can get 20% of the redemption fee
● 1600*20%=320U, Jack can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
➢ Lily's redemption fee commission sharing
● The total redemption fee brought by Lily is 2 million*1%*30%=6000 USDT.
● After deducting 20% of the platform, the actual allocation would be 3000*80%=4800 USDT
● Because it belongs to the S2 level, can get 40% of the redemption fee
● 4800*40%=1920U, Lily can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
➢ Joy’s redemption fee commission sharing
● The total redemption fee brought by Joy is 2 million*1%*60%=12000USDT.
● After deducting 20% of the platform, the actual allocation would be 6000*80%=9600USDT.
● Because it belongs to the S3 level, can get 60% of the redemption fee
● 9600*60%=5760U, Joy can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
4.4 Cases of Management fee Commissions sharing
● The management fee withdrawal is triggered by the portfolio manager
● Assuming that the portfolio manager withdraws the management fee (after deducting 20% of the platform), the total is 20,000 USDT, then:
➢ Jack's management fee commission sharing
● Jack’s level is S1, and the management fee-sharing ratio is 5%
● The management fee that Jack deserves is: 20000*5%=1000USDT
● The management fee is distributed when the portfolio manager completes the management fee withdrawal, and Jack can withdraw the proceeds.
➢ Lily's management fee commission sharing
● Lily’s level is S2, and the management fee-sharing ratio is 10%
● The management fee that Lily deserves is: 20000*10%=2000USDT
● The management fee is distributed when the portfolio manager completes the management fee withdrawal, and Lily can withdraw the proceeds.
➢ Joy’s management fee commission sharing
● Joy’s gear is S3, and the management fee-sharing ratio is 20%
● The management fee that Joy deserves is: 20000*20%=4000USDT
● The management fee is distributed when the portfolio manager completes the management fee withdrawal, and Joy can withdraw the proceeds.
4.5 Cases of Performance Fee Commission sharing
● The assets at the end of the period are 2 million, and the liabilities of asset management products are 0.
● The profit of asset management products is: 2 million-1 million principal = 1 million
● The performance fee ratio is 30%, and the performance fee to be distributed is 1 million * 30% = 300,000 USDT
● The performance fee after deducting platform income is: 300,000*80%=240,000
➢ Jack's performance fee commission sharing
● Jack’s level is S1, and the performance fee ratio is 1%
● The performance fee that Jack deserves is: 240000*1%=2400USDT
● Jack can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
➢ Lily's performance fee commission sharing
● Lily’s level is S2, and the performance fee-sharing ratio is 2%
● The performance fee that Lily deserves is: 240000*2%=4800 USDT
● Lily can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
➢ Joy's performance fee commission sharing
● Joy’s level is S3, and the performance fee-sharing ratio is 3%
● The performance fee that Joy deserves is: 240000*3%=7200USDT
● Joy can withdraw the proceeds after the end of the operation period and the completion of the liquidation.
V. Summary
Rules for income distribution according to the DeSyn Protocol：
The total return of the investment portfolio in the case, after deducting 20% of the platform service fee, is shown in the table below:
Fee | Amount （USD） |
Issuance Fee | 8,000 |
Redemption Fee | 8,000 |
Management Fee | 20,000 |
Performance Fee | 240,000 |
Total | 276,000 |
The above incomes are divided among managers and fundraising partners in the order listed. After the liquidation is completed, the income will be distributed to the fundraising partners first. The management team will then own the remaining income, which will be divided in accordance with the management team's established income-sharing ratio.
Therefore, the total commissions that fundraising partners can get are as follows:
Name | Issuance Fee | Redemption Fee | Management Fee | Performance Fee | Total |
Jack | 160 | 320 | 1000 | 2400 | 3,880 |
Lily | 960 | 1920 | 2000 | 4800 | 9,680 |
Joy | 2880 | 5760 | 4000 | 7200 | 19,840 |
Total | 4000 | 8000 | 7000 |
| 33,400 |
The calculation and distribution of the above income are all guaranteed by smart contracts, and fundraising partners only need to pay attention to the withdrawable balance.
Therefore, the total commissions that the management team can obtain are as follows：
Total income generated by the manager's team：276000-33400=242600
If there are two managers in this group, Luke and Jason, and the distribution ratio is 50% each, the contract will divide the income of 242,600 into two parts, each of which is 121,300 USDT, and Luke and Jason only need to withdraw it to their own wallet after the liquidation is complete.
You are welcome to [Join the community] to advance any queries and suggestions you may have.
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