Profit Sharing

Detailed guide to profit calculation and payout distribution.

Overview

Profit sharing aligns incentives between investors and traders on Atract. When a vault closes profitably, both parties receive their agreed-upon percentage of the net profit.

Key Principle: Investor always gets principal back first; profits are split only after capital is returned.

Basic Calculation

Net Profit = Final Balance - Initial Balance

If Net Profit > 0:

  • Trader Share = Net Profit × Trader %

  • Investor Share = Initial Balance + (Net Profit × Investor %)

If Net Profit ≤ 0:

  • Trader Share = 0

  • Investor Share = Final Balance

Example

Profitable Trade:

  • Initial: $10,000

  • Final: $15,000

  • Profit: $5,000

  • Split: 80/20 (Trader/Investor)

Payout:

  • Trader: $5,000 × 80% = $4,000

  • Investor: $10,000 + ($5,000 × 20%) = $11,000

Loss: If final balance is $8,500 (loss of $1,500):

  • Trader: $0

  • Investor: $8,500

Common Split Ratios

Split
Use Case

80/20

Standard (most common)

70/30

Higher investor share for newer traders

90/10

Higher trader share for proven track record

Settlement Process

  1. Vault Closes - All positions closed, final balance determined

  2. Profit Calculated - System computes net profit/loss

  3. Shares Allocated - Each party's payout calculated

  4. Withdrawal Enabled - Both parties can withdraw their share

Withdrawal

Process:

  1. Go to vault dashboard after closure

  2. Click "Withdraw"

  3. Confirm transaction

  4. USDC transferred to wallet

Rules:

  • Can only withdraw once

  • Must withdraw full amount

  • No time limit on withdrawal

  • Gas fees apply

Tax Considerations

Consult a tax professional.

  • Profits may be taxable as income or capital gains

  • Keep records of all trades and settlements

  • Export trade history from dashboard

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