Expense Ratio

AMKT collects a fee from holders using an inflationary mechanism.

What is the expense ratio?

AMKT uses a fixed token supply inflation rate to capture an expense ratio.
At launch, the daily inflation rate is set such that the annual reduction in assets backing each AMKT is approximately 95 bps (0.95%). Inflation is calculated in a publicly verifiable manner through the smart contract.

How is inflation calculated?

Inflation occurs when index tokens are minted, burned, the inflation fee is changed, or when explicitly called by the owner of the smart contracts. In all cases, the FeeReceiver does not decide how many tokens are minted. Rather, the smart contract calculates the amount to be minted based on the time since the last mint. The quantity of tokens sent to the FeeReceiver is determined by compounding a daily inflation rate a number of times equivalent to the number of days that have passed since the last inflation event.
Fees are denominated in AMKT; AMKT inflated new units of the token are sent to the FeeReceiver but the value of collateral in the vault remains the same.