# Fees

Fathom Vaults have _Protocol Fees_, and _Performance Fees_. These fees are taken each time a vault or strategy reports gains, effectively ensuring that the ecosystem is sustainable and that the developers, as well as the infrastructure maintainers, are compensated for their contributions.

**Control and Customization**

The Fathom governance model empowers vault and strategy managers with autonomy over the fee mechanisms. They can determine the extent of fees charged, which provides an incentive structure aligned with the success of their strategies. At the same time, it offers rewards to the Fathom platform for providing the foundational infrastructure utilized by these financial instruments.

**Governance and Fee Settings**

The protocol fees are governed and adjustable through Fathom Governance, with the possible range set from 0% to 50%. This wide range allows for significant flexibility in adjusting to market conditions and strategy performance. Additionally, Fathom Governance possesses the capability to specify custom fee settings for individual vaults and strategies, enabling a tailored approach to fee imposition based on specific needs and circumstances.

**Fee Distribution Example**

To illustrate, consider a scenario where a strategy yields a profit of 100 FXD:

* **Performance Fee**: 20%
* **Protocol Fee**: 10% of the Performance Fee

Calculations:

* **Total Fees**: 100 FXD \* 20% = 20 FXD
* **Protocol Fees**: 20 FXD \* 10% = 2 FXD
* **Performance Fees**: 20 FXD - 2 FXD = 18 FXD

In this example, 18 FXD is allocated to the strategy managers or the specified recipients of the performance fees, while 2 FXD is directed to the Fathom Treasury to support ongoing development and maintenance.
