R25 Vault Performance Fee Policy

Effective Date: November 5, 2026, at 00:00 (UTC+8)

This policy applies to all existing standardized R25 Vaults from the effective date and time stated above.

1. Overview

A performance fee rewards the Curator for generating investment gains in an R25 Vault. It is charged only on gains above the Vault’s applicable fee threshold, which accounts for both its annual hurdle rate and historical high-water mark.

Performance fees are paid by issuing new Vault Shares. Of the total fee shares issued, 95% are allocated to the Curator and 5% to R25.

2. Performance Fee Rate

Each Vault has a performance fee rate between 0% and 50%. If the rate is 0%, no performance fee is charged.

The 95% / 5% allocation is a split of the total performance fee, not an additional charge.

3. The Performance Fee Threshold

The Vault’s performance fee threshold is called its effective high-water mark. It is the higher of:

• The existing historical high-water mark: The NAV per share benchmark carried forward from previous periods.
• The current hurdle NAV: The NAV per share benchmark calculated using the Vault’s annual hurdle rate and the time elapsed since its first subscription successfully settled.

$HWM_{\mathrm{effective}}=\max\left(HWM_{\mathrm{historical}},NAV_{\mathrm{hurdle}}\right)$

A performance fee applies only when the Vault’s NAV after management fees, but before performance fees, is strictly above this threshold. No performance fee is charged when NAV is equal to or below it.

How the hurdle NAV grows

The hurdle NAV starts from the Vault’s initial NAV at the time its first subscription successfully settles. It grows using the specified annual hurdle rate, compounded according to the actual elapsed time in seconds:

$NAV_{\mathrm{hurdle}}=NAV_0\times(1+R_h)^{\frac{t-t_0}{31{,}536{,}000}}$

Here, $NAV_0$ is the initial NAV, $R_h$ is the annual hurdle rate, $t_0$ is the first successful subscription settlement timestamp, and $t$ is the current calculation timestamp. Timestamps are measured in seconds.

The calculation uses a fixed 365-day year, equivalent to 31,536,000 seconds. Partial days are included without rounding the elapsed time to whole days.

For example, with an initial NAV of 1.00 and an annual hurdle rate of 10%, the hurdle NAV is approximately:

• 1.000261 after 24 hours
• 1.000131 after 12 hours

The hurdle calculation always continues from its original starting time. Daily settlements, subscriptions, redemptions, and performance fee charges do not reset it.

How the historical high-water mark works

For each fee calculation, the Vault first compares its NAV after management fees, but before performance fees, with the effective high-water mark calculated using the existing historical high-water mark.

If that NAV exceeds the effective high-water mark:

1. The performance fee is calculated on gains above that threshold.
2. The historical high-water mark is raised to the current NAV after management fees, but before performance fees.
3. The performance fee is crystallized through the issuance of new Vault Shares.

The updated historical high-water mark is used for subsequent fee calculations. It does not replace the threshold used to calculate the fee for the current period.

The historical high-water mark does not decrease because NAV falls, including when NAV per share falls as a result of issuing performance fee shares.

4. How the Performance Fee Is Calculated

The fee applies only to the portion of the Vault’s assets above the effective high-water mark multiplied by its outstanding shares.

$E=\max\left(0,A-HWM_{\mathrm{effective}}\times S\right)$

$F_{\mathrm{total}}=E\times R_{\mathrm{pf}}$

Here, $A$ is the Vault’s assets, $S$ is its outstanding shares, $E$ is the excess gains eligible for the fee, and $R_{\mathrm{pf}}$ is the performance fee rate.

Vault assets and outstanding shares are measured after management fee settlement and before performance fee shares are issued. If excess gains are zero or negative, no performance fee is charged.

Example

Assume an eligible Vault has:

Item	Value
Assets after management fees, before performance fees	$1,200
Outstanding Vault Shares before performance fees	1,000
NAV after management fees, before performance fees	$1.20
Existing historical high-water mark	$1.08
Current hurdle NAV	$1.10
Performance fee rate	20%

The effective high-water mark is **$1.10**, the higher of$ 1.08 and $1.10.

Excess gains:

$E=1{,}200-(1.10\times1{,}000)=100$

Total performance fee:

$F_{\mathrm{total}}=100\times20\%=20$

Curator and R25 allocations:

$F_{\mathrm{Curator}}=20\times95\%=19$

$F_{\mathrm{R25}}=20\times5\%=1$

All amounts in this example are in US dollars.

The historical high-water mark is raised to **$1.20**, the NAV after management fees and before performance fees. The$20 fee is then paid through newly issued Vault Shares.

5. How Performance Fees Are Paid

Performance fees are paid by issuing new Vault Shares rather than transferring assets out of the Vault at the time of crystallization.

The number of new shares is calculated so that their theoretical value immediately after issuance equals the total performance fee:

$M=\frac{F_{\mathrm{total}}\times S}{A-F_{\mathrm{total}}}$

Here, $M$ is the total number of performance fee shares issued. The calculation requires $A>F_{\mathrm{total}}$.

The NAV after issuance and the value of the fee shares satisfy:

$NAV_{\mathrm{after}}=\frac{A}{S+M},\qquad M\times NAV_{\mathrm{after}}=F_{\mathrm{total}}$

Your existing share count does not change when fee shares are issued. However, the total number of outstanding shares increases, reducing your proportional ownership and NAV per share to reflect the fee.

In the example above, approximately 16.949153 new Vault Shares are issued to pay a performance fee of 20 USDC. After issuance, the NAV per share is 1.18 USDC, making the total value of the newly issued shares 20 USDC.

Of these newly issued shares, 95% are allocated to the Curator and 5% to R25, equivalent to 19 USDC and 1 USDC, respectively, at the NAV immediately after issuance.

Actual share amounts are subject to the precision and rounding rules used by the Vault. The allocated shares must add up to the total shares issued.

6. Daily Calculation and Crystallization

For eligible Vaults, performance fees are calculated daily at a fixed cutoff time, after the day’s management fees have been settled.

At each cutoff, the system:

1. Determines the Vault’s assets, outstanding shares, and NAV after management fees and before performance fees.
2. Calculates the current hurdle NAV.
3. Determines the effective high-water mark using the existing historical high-water mark and current hurdle NAV.
4. Checks whether the Vault is eligible for performance fee crystallization, including whether any Vault lockup has ended.
5. If eligible and NAV exceeds the threshold, calculates the fee on excess gains, raises the historical high-water mark to the current pre-performance-fee NAV, and issues and allocates the fee shares.

If the applicable conditions are not met, no performance fee shares are issued.

7. Vaults with a Lockup Period

For a Vault with a lockup period, no performance fees are crystallized and no performance fee shares are issued before the lockup ends.

During the lockup:

• The hurdle NAV continues to grow according to the actual elapsed time.
• The historical and effective high-water marks continue to be maintained under their applicable rules.
• No performance fee shares become available for withdrawal.

After the lockup period ends, performance fees are assessed at every daily cutoff, following management fee settlement. At each cutoff:

1. The Vault’s NAV after management fees, but before performance fees, is compared with the effective high-water mark, calculated as the higher of the existing historical high-water mark and current hurdle NAV.
2. If NAV exceeds this threshold, a performance fee is calculated only on the excess gains.
3. The historical high-water mark is raised to the current NAV after management fees, but before performance fees.
4. The performance fee is crystallized through the issuance of new Vault Shares, with 95% allocated to the Curator and 5% to R25.

The updated historical high-water mark is used for subsequent fee calculations. If NAV is equal to or below the effective high-water mark, no performance fee is crystallized at that cutoff.

The end of the lockup does not automatically trigger a performance fee or make newly crystallized fee shares immediately withdrawable. Each batch of performance fee shares must complete the 15-day waiting period from its crystallization time before it becomes eligible for withdrawal, subject to any other applicable unlocking, redemption, and settlement requirements.

8. NAV Declines and No Clawback

R25 Vault performance fees do not use a clawback mechanism. Once performance fee shares have been issued, they will not be cancelled, recovered, or refunded because the Vault’s NAV subsequently falls.

Following a decline:

• The historical high-water mark does not automatically decrease.
• The hurdle NAV continues according to its original calculation schedule.
• The effective high-water mark remains the higher of those two benchmarks.
• No new performance fee is charged while NAV is at or below the effective high-water mark.

If NAV later exceeds the then-applicable effective high-water mark, only gains above that threshold are subject to a new performance fee.

Previously issued performance fee shares remain outstanding, and their value continues to change with the Vault’s NAV.

9. Management Fee and Performance Fee Withdrawals

Both management fee shares and performance fee shares are subject to a 15-day waiting period from crystallization. Only shares crystallized at least 15 days before the withdrawal request are eligible for withdrawal.

The waiting period applies separately to each batch of crystallized fee shares. Shares crystallized within the preceding 15 days remain unavailable for withdrawal, even if older fee shares are eligible. Completing the waiting period makes shares eligible for a withdrawal request; redemption and settlement still follow the Vault’s applicable rules.

Curators can request a performance fee withdrawal through Withdraw Performance Fees and a management fee withdrawal through the corresponding management fee withdrawal entry.

Only management fee or performance fee shares that have already been issued, allocated to the Curator, completed the 15-day waiting period, and met any other applicable withdrawal conditions are included in the corresponding available balance. Potential fees that have not yet been crystallized are not available for withdrawal.

Withdrawals follow the Vault’s existing share redemption process:

1. The Curator submits a withdrawal request.
2. The system checks the eligible management fee or performance fee share balance, including the crystallization date of each batch.
3. The shares are redeemed under the Vault’s applicable redemption rules.
4. After redemption settles, the corresponding USDC is transferred to the Curator’s wallet.

Any additional unlocking requirements for fee shares also apply. A subsequent NAV decline does not trigger a clawback or cancellation of those shares.

10. Settlement Exceptions

If a fee calculation or share issuance fails, the failed issuance is not treated as completed. Any retry must avoid issuing shares again for a fee that has already been successfully paid.

A daily cutoff does not override a Vault’s lockup or other performance fee eligibility requirements.