Profit Sharing
Detailed guide to profit calculation and payout distribution.
Overview
Profit sharing is the core mechanism that 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 BalanceExample Scenarios
Scenario 1: Profitable Trade
Initial: $10,000
Final: $15,000
Profit: $5,000
Split: 80/20 (Trader/Investor)
Trader Gets: $5,000 × 80% = $4,000
Investor Gets: $10,000 + ($5,000 × 20%) = $11,000Scenario 2: Loss
Initial: $10,000
Final: $8,500
Loss: -$1,500
Trader Gets: $0
Investor Gets: $8,500Scenario 3: Break Even
Initial: $10,000
Final: $10,000
Profit: $0
Trader Gets: $0
Investor Gets: $10,000Common Split Ratios
80/20 (Standard):
Industry standard
Balanced incentives
Most common on Atract
70/30 (Conservative):
Higher investor share
For newer traders
Compensates for higher risk
90/10 (Aggressive):
Higher trader share
For proven traders
Investor accepts lower return
Settlement Process
Vault Closes - All positions closed, final balance determined
Profit Calculated - Smart contract computes net profit/loss
Shares Allocated - Each party's payout calculated
Withdrawal Enabled - Both parties can withdraw their share
Withdrawal
Process:
Go to vault dashboard after closure
Click "Withdraw"
Confirm transaction
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
Related Pages
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