1. Overview:
This SIP proposes reducing the protocol management fee on the EURC Vault on Base from 1.0% to 0.3% in order to improve net depositor yield and strengthen the vault’s competitiveness within the Euro-denominated stablecoin market.
With the recent addition of 2 Morpho V2 arks into the EURC Base Fleet, we should keep monitoring the performance of the Base EURC Vault and add any new/established strategies into this Fleet.
NOTE: This proposal builds on community feedback and the [RFC] authored by @halaprix.
2. Motivation:
At the current 1% management fee, the Lazy Summer EURC Vault faces a potential structural disadvantage when compared to competing yield strategies that operate with lower overhead. This reduces the net APY received by depositors, which in turn can limit TVL growth and reduce the vault’s visibility across yield aggregators.
Reducing the protocol fee to 0.3% is expected to:
- Increase net yield for vault depositors
- Improve the vault’s ranking across yield platforms
- Attract additional TVL from price-sensitive liquidity providers
- Strengthen Lazy Summer’s positioning as a preferred venue for EURC yield
While the fee reduction decreases margin per unit of capital, the expectation is that higher vault utilization and TVL growth will partially or fully offset the reduced fee percentage over time. This change therefore prioritizes growth and competitiveness of the EURC vault within the broader Base ecosystem.
3. Specification:
This proposal introduces a single protocol parameter change affecting the EURC Vault on Base.
3.1 Parameter Change:
| Parameter | Current Value | Proposed Value |
|---|---|---|
| Management Fee | 1.0% | 0.3% |
3.2 Vault Details
| Parameter | Value |
|---|---|
| Vault | EURC LR |
| Network | Base |
| Address | 0x64db8f51f1bf7064bb5a361a7265f602d348e0f0 |
3.3 Implementation
The proposal requires a protocol parameter update to the vault’s management fee configuration. No smart contract upgrades or structural changes are required. The update can be executed through the standard governance execution process.
4. Risk Assessment:
This proposal introduces minimal technical risk, as it only modifies a configuration parameter. However, there are several economic considerations:
- Treasury Revenue Reduction
Lowering the management fee reduces the DAO’s fee capture per unit of TVL. The proposal assumes that increased TVL and utilization will partially offset the lower fee percentage.
- Market Competitiveness
If the fee remains too high relative to competing strategies, the vault may struggle to attract liquidity. A 0.3% fee aligns more closely with market standards for low-risk stablecoin vaults.
- Governance Flexibility
If the change does not produce the desired effect on vault growth, governance retains the ability to adjust the fee parameter again through future proposals.
5. Voting:
If YES - Reduce the EURC Vault management fee on Base from 1.0% → 0.3% and execute the parameter update via the DAO governance process.
If NO - Maintain the current 1.0% management fee for the EURC Vault
Tagging @Recognized_Delegates for a checkup as always.
–jensei