> For the complete documentation index, see [llms.txt](https://vaultbook.gauntlet.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://vaultbook.gauntlet.xyz/vaults/morpho-vaults/vault-fees.md).

# Vault Fees

Gauntlet keeps fees competitive across all Morpho vaults. The fee structure differs between Morpho v1 and v2.

## Morpho v1

Morpho v1 vaults use a single performance-based fee. There is no management fee component.

**Performance Fee** — a percentage of the actual interest accrued onchain from the underlying variable rate markets. Capped at 50% of generated interest. The performance fee applies to native yield only and is not charged on rewards earned through incentive campaigns.

The fee rate and recipient are controlled by the vault owner. Changes take effect immediately with no timelock delay.

## Morpho v2

Morpho v2 vaults introduce a dual-fee model managed by the Curator. Both fee parameters are subject to timelock protections, meaning changes do not take effect immediately — this protects depositors from sudden fee increases.

**Performance Fee** — a percentage of vault-generated yield from allocated assets. Capped at 50% of generated interest. As with v1, this applies to native yield only.

**Management Fee** — an annual fee charged on total deposited assets. Capped at 5% per year. It accrues incrementally during interest calculations rather than as a lump-sum charge.

## Fee Collection

Fees in both v1 and v2 are collected by minting new vault shares to the designated fee recipient rather than withdrawing principal. Recipients must actively call `redeem()` to convert shares into the underlying asset — fees are not automatically transferred to a wallet.


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