Kodiak Kodiak Baults: compounding and exit costs
These Berachain vaults reinvest WBERA rewards into additional Kodiak Island tokens. Compare each Bault’s compound fee and exit adjustment separately from the underlying Island’s manager fee.
- Eligible deposits
- Kodiak Island tokens accepted by the selected Bault from pools eligible for Berachain Proof-of-Liquidity (PoL) rewards
- Receipt tokens
- ERC-4626 Bault receipt tokens representing proportional ownership of the vault
- Deposit fee
- 0
- Compound fee
- Up to 4.2%, varying by Bault; some Baults may charge less
- Exit adjustment
- Value of one compound, allocated to remaining depositors to discourage reward hijacking
Direct staking and Bault compounding
Direct reward-vault staking and Baults use eligible Island tokens to earn WBERA through Berachain PoL. Direct staking earns rewards in WBERA; a Bault reinvests those rewards into more tokens of the same Island.
The Bault stakes its Island tokens in the reward vault and restakes additional tokens after compounding. Through a continuous, permissionless auction, keepers exchange an Island-token bounty for accrued WBERA rewards. Market pricing determines when the accrued rewards match the bounty’s value in Island tokens.
Separate the fee layers
Kodiak Islands automatically compound liquidity-provider (LP) fees and charge a manager fee of 10% of LP fees generated. Both protocol-managed and permissionless Islands charge this fee, which belongs to the underlying liquidity-management layer.
The Bault adds a separate charge for its reward-compounding process, with rates varying across individual vaults. The documented upper rate of 4.2% does not establish the charge for every Bault. Keep this charge distinct from the Island manager fee when comparing the cost of reinvesting WBERA rewards.
The one-compound exit adjustment
The exit rule assigns one compound’s value to remaining depositors to discourage reward hijacking. Its amount therefore depends on the value of that compound, even though the documentation describes exits as effectively free.
The Baults documentation describes the adjustment as typically below 0.01% and estimates rewards offset it in under 30 minutes. These are general estimates; the one-compound rule determines the adjustment for the exit under consideration.
Bault comparison checklist
- Match the underlying Island and PoL eligibility when comparing direct staking with a Bault.
- Identify the specific Bault’s compound fee; an unspecified rate leaves its compounding cost unresolved.
- Keep the Island’s 10% manager fee on LP earnings separate from the Bault’s compounding charge.
- Include the exit adjustment; a zero-cost estimate misses the value allocated to remaining depositors.
