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SAI Wallet

Economics

This section describes the monetization model of SAI Wallet, based on commission income from operations executed through the application’s smart contracts. The section uses the same cost breakdown model as the sections on staking and swap (see Yield and Swap) and relies on execution observability through events and transactions.

The chapter discusses the methodology for calculating workflow execution costs and break-even conditions. Costs are aggregated in the FeeBreakdown model; then the net result for the user is determined.

Application Fee as a Route Cost Component

The SAI Wallet fee is introduced as a separate component:

$$F_{app} = \alpha \cdot P_0,$$

where $P_0$ is the operation amount in base units (typically USD equivalent), $\alpha$ is the application fee rate (as a fraction). Depending on implementation, the fee may be deducted:

  • from the input amount (reducing the amount participating in exchange/deposit);
  • from the output amount (reducing the operation result);
  • as a separate transfer within the same workflow.

In the aggregate cost model:

$$F_{all} = F_{gas} + F_{infra} + F_{swap} + F_{prot} + F_{app}.$$

Fee Collection Through Smart Contracts

In scenarios where operations go through SAI Wallet smart contracts, the fee $F_{app}$ can be implemented as:

  • deduction of a fixed fraction of the operation amount;
  • deduction of a fixed amount (min-fee) in addition to the fraction;
  • combined scheme (min/max, or tier model by volume).

Regardless of the specific scheme, the key property is observability: fee deduction is part of the workflow and is recorded as a step with execution artifacts (txHash) or as a contract event.

Which Operations Are Subject to Fees

The application fee is considered a route parameter and applies to certain operation classes, for example:

  • cross-chain exchange/transfer of stablecoins (swap/route through SAI Wallet contracts);
  • operations requiring unified routing and quota (complex multi-step workflows).

For operations executed through an external exchange module (see Swap), the fee $F_{app}$ may be disabled or applied separately, depending on the economic model and integration conditions.

Methodology for Calculating Yield and Fees

Below are notations and formulas used in SAI Wallet to estimate strategy yields and aggregate route costs. If strategies in different networks or with different assets are compared, all amounts are converted to a single base (typically USD equivalent) using current quotes.

Notations and Units

  • $P_0$ - initial deposit (in asset units or USD equivalent).
  • $T$ - investment horizon in years.
  • $r$ - annual rate (APR) as a fraction.
  • $n$ - number of compounding periods per year (if applicable).
  • $APY$ - annual yield with compounding.
  • $F_{gas}$ - total network fees for all route transactions (in USD equivalent).
  • $F_{infra}$ - cross-chain infrastructure fees (bridge/messaging), if the route is cross-chain.
  • $F_{swap}$ - exchange losses: pool fees, spread, and slippage (in USD equivalent).
  • $F_{prot}$ - strategy protocol fees (management/performance fee, etc.).
  • $F_{app}$ - SAI Wallet fee (if applicable to the route).
  • $F_{all}$ - total route costs.

Total costs are written as:

If the application fee does not apply to the operation, $F_{app}=0$ is assumed.

$$F_{all} = F_{gas} + F_{infra} + F_{swap} + F_{prot} + F_{app}$$ If some fees are expressed in the network’s native coin, conversion to USD equivalent is performed at the native asset price: $$F_{gas}^{USD} = \sum_{i=1}^{k} \left(g_i \cdot p_i \cdot \pi_{native,i}^{USD}\right)$$ where $g_i$ is the actual gas consumption (or other measurable resource) for the $i$-th transaction, $p_i$ is the gas price (in native coin), $\pi_{native,i}^{USD}$ is the native coin price in USD.

APR and APY

APR ($r$) is the nominal annual rate without compounding. If income is reinvested $n$ times per year, the corresponding annual yield (APY) is:

$$APY = \left(1 + \frac{r}{n}\right)^n - 1$$ If the strategy already publishes $APY$ as the final metric, then to estimate deposit growth over horizon $T$, it is convenient to use: $$P(T) = P_0 \cdot (1 + APY)^{T}$$

Deposit Growth Over Time

With discrete compounding $n$ times per year, the expected amount:

$$P(T) = P_0 \cdot \left(1 + \frac{r}{n}\right)^{nT}$$ Gross profit: $$\Delta P_{gross}(T) = P(T) - P_0$$ For strategies where income is “capitalized” continuously (e.g., through share price changes or internal compounding), $n$ serves as an approximation. In this case, it is more correct to work with the published $APY$ and the formula $P(T) = P_0(1+APY)^T$.

Protocol Fees

Protocol fees most often fall into two types:

Management fee

Management fee ($m$) - regular “management” fee, usually set as an annual fraction of capital. In a simplified model, it can be accounted for as a reduction in the effective rate:

$$r_{eff} = r - m$$

Performance fee

Performance fee ($q$) - fee charged on profit. If performance fee applies to gross profit, then profit after performance fee:

$$\Delta P_{after}(T) = \Delta P_{gross}(T)\cdot (1-q)$$ Accordingly: $$P_{after}(T) = P_0 + \Delta P_{after}(T)$$ In practice, fee accrual rules depend on the protocol (high-water mark, calculation period, etc.). In route calculations, the fact is important: $F_{prot}$ refers to a separate cost component and is accounted for separately from network fees.

Swap Losses and Slippage

For exchange, two values can be distinguished:

  • “expected output” $Q_{exp}$ at the quote;
  • “actual output” $Q_{act}$ at execution.

Swap loss can be estimated as:

$$F_{swap}^{USD} \approx (Q_{exp} - Q_{act}) \cdot \pi_{out}^{USD}$$ where $\pi_{out}^{USD}$ is the output asset price in USD.

If an acceptable slippage $s$ (as a fraction) is used and the input amount is converted to USD equivalent $P_0^{USD}$, a rough estimate:

$$F_{swap}^{USD} \lesssim s \cdot P_0^{USD}$$ while $F_{swap}$ usually already includes the pool fee (fee tier).

Based on this model, net results and break-even points can be estimated for different user scenarios.