[RFC] Reduce the protocol fee on EURC vault

[halaprix]

Target Vault: EURC Vault (Base)

Contract Address: 0x64db8f51f1bf7064bb5a361a7265f602d348e0f0

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1. Summary

I am putting forward this RFC to decrease the management fee on the EURC Vault on Base from its current 1% to 0.3%.

2. Context & Motivation

As the Euro-stablecoin ecosystem matures on Base, the current 1% fee has become a barrier to maintaining competitive net APYs for our users. To remain the preferred venue for EURC yield, we need to align our fee structure with broader market standards and similar low-volatility vault protocols.

Reducing the fee to 0.3% will:

• Increase the net yield passed on to vault depositors.

• Improve the vault’s ranking on yield aggregators.

• Drive higher Total Value Locked (TVL) by attracting price-sensitive liquidity providers.

3. Proposal

This proposal recommends a direct parameter update to the EURC Vault on Base:

Parameter	Current Value	Proposed Value
Management Fee	1.0%	0.3%
Network	Base	Base
Vault Address	0x64db...e0f0	0x64db...e0f0

Implementation

The change will be executed as a protocol parameter update. If community consensus is reached, this will proceed to a formal Summer Improvement Proposal (SIP).

4. Open Questions

• Is 0.3% aggressive enough? Does the community believe this provides a sufficient competitive edge, or should we consider a different tier?

• Volume vs. Margin: Does the community agree that the projected increase in TVL will offset the reduction in the fee percentage for the DAO treasury?

5. Next Steps

1. Gather Community Feedback: I invite stakeholders and @Recognized_Delegates to share their thoughts on this adjustment.

2. Snapshot/SIP: If no significant objections are raised within 5 days, I will move this to a formal proposal for execution.

[jensei]

thank you @halaprix for bringing this one up. I remember this has been brought up on the forum previously as a user feedback here: Please consider a lower fee on EURC vaults. I am generally aligned with the change here, of course trying to think how much impact will this have on revenue generated for the protocol, but seeing outflows from the vault via Dune:

2025-06-16	2025-08-16	2025-10-16	2025-12-16	2026-02-16
$2,201,066	$1,941,597	$1,215,763	$1,738,165	$777,608

makes it quite clear to me that there mught be better opportunities for EURC outside of the Lazy Summer Protocol. The 30d APY sits at 2.50% with live APY at 1.69%, so besides the decrease in the fee, I would be curious if we can get any new ARKs listed in LR EURC Base Fleet (@samehueasyou any insight?)

Discover | vaults.fyi

[Sixty]

Great suggestion here @halaprix, but I’m personally not convinced that a 70 bps fee cut would be of much help in this situation.

Native EURC lending APYs on Base currently sit in the ~0.5%–0.66% range, with additional yield driven by external token incentives (+2% in token incentives on Morpho & Fluid) rather than organic borrow demand. In this context, the vault’s gross yield ceiling is structurally limited. Reducing protocol fees does improve net APY, but marginal fee differences alone may not be sufficient to attract additional TVL.

On Volume vs Margin: Cutting fees by 70% also reduces treasury inflows, while the upside depends on a second-order effect (TVL growth) that is uncertain in a low-yield environment. From a risk-adjusted perspective, this trade-off feels unfavorable without a clear estimate of elasticity, i.e., how much additional TVL a 70 bps fee cut realistically attracts.

My Recommendations

1. Onboard Morpho V2 vaults to the Base EURC fleet, they are currently receiving a very significant boost in APY thanks to MORPHO rewards, compared to the current Morpho ARKs on the EURC fleet. This can boost competitiveness in the short term.

2. Onboard an Ethereum mainnet EURC fleet, there is 3.6x more EURC circulating on mainnet than on Base, and yields are significantly better on avenues where EURC is supported. Long term, this could be a better driver for TVL growth.

3. Figure out what’s happening with vaults.fyi. They currently list Summer EURC 30d as 1.5% vs 2.5% on the Summer frontend.

[vumichien]

Thanks for the RFC @halaprix. Sharing some live data and context that I think sharpens the discussion.

Where the vault actually stands today (Feb 18, 2026)

The vault now sits at 582,000 EURC (~$688,890) — continuing the decline @jensei flagged. The deposit cap is 7.50M EURC and we’re only at 7.76% utilization. That’s an important signal: this isn’t a capacity problem, it’s a demand problem. The cap is not the constraint.

Critically, SUMR rewards are already active — the vault currently shows 1.68% base APY + 0.62% SUMR on top. So the protocol is already spending token incentives on this vault, and TVL is still declining. This undermines the core assumption of the RFC: if incentives haven’t arrested the outflow, a fee cut that improves net APY by ~0.7% at current gross yields is unlikely to reverse the trend on its own.

The break-even math on the fee cut

At $688K TVL, the vault generates roughly $6,880/year at 1%. Cutting to 0.3% drops that to ~$2,065/year — a $4,800 annual loss in treasury revenue. To simply recover that lost revenue at the new 0.3% rate, TVL would need to grow to ~$2.3M — a 3.3x increase from current levels, in a vault that has been in continuous outflow since June 2025. That’s a high bar without a concrete demand catalyst.

The ECB macro context matters

The ECB deposit facility rate is currently 2.00% and has been held steady since June 2025. Traditional euro savings accounts (N26, Revolut, Wise) are all offering 1.74%–2.49%. Our vault’s 1.68% base APY is actually below what European savers can get from a regulated bank account with zero smart contract risk. The SUMR reward brings the total to ~2.30%, which is barely competitive with TradFi alternatives — let alone with Morpho/Fluid which are offering 2%+ in token incentives on top of base yield. No fee level fixes this if the gross yield ceiling is anchored below what a Revolut account pays.

Recommendation

Support the fee cut directionally, but the bigger lever is ARK expansion (Fluid EURC, Tokemak baseEUR,..). A fee cut that brings net APY from ~2.30% to ~3.00% combined with a new high-yield ARK is a much stronger narrative than the fee cut alone. Otherwise we are trimming treasury revenue on a declining vault without fixing the underlying yield competitiveness problem.