How Returns Work

Collective vaults generate returns from vendor trading activity. Here's how it works.

Source of Returns

Vendors make money by:

1. Buy low, sell high — Sourcing cards below market value and selling at fair price

2. Arbitrage — Exploiting price differences across platforms or regions

3. Timing — Buying before anticipated demand spikes (set rotations, anniversaries, etc.)

4. Grading plays — Buying raw cards, grading them, selling the graded versions at premium

Returns vary based on market conditions, vendor skill, and opportunities available.

How Value Is Tracked

The vault's value is calculated as:

Vault Value = Cash on Hand + Inventory Value

Cash on hand: Stablecoins sitting in the vault (not yet deployed or from recent sales)

Inventory value: Fair market value of all cards held by the vendor, based on:

• Recent comparable sales

• Auction data

• Grading population reports

• Conservative estimates for illiquid items

Vault value is updated regularly (at least weekly) and always at epoch boundaries.

Your Returns

Your returns are proportional to your vault token holdings:

Your Value = (Your Vault Tokens / Total Vault Tokens) × Vault Value

Returns compound automatically. As the vault grows, your tokens are worth more — no need to claim or reinvest.

Fees

Vendors charge a performance fee on profits. This is only taken when the vault increases in value above its previous high (high-water mark).

Current fee structure:

• Performance fee: 20% of profits

• Operating costs: Covered from vault (travel, show fees, grading, shipping)

Operating costs are reported transparently and capped to prevent abuse.

Example:

• Vault starts at $100,000

• Vault grows to $120,000 → $20,000 profit

• 20% performance fee → $4,000 to vendor

• Net vault value → $116,000

If the vault later drops to $110,000 and recovers to $116,000, no fee is taken (high-water mark not exceeded).

Historical Performance

Past performance is shown on each vendor's profile page. We display:

• Monthly and quarterly returns

• Cumulative performance since inception

• Comparison to relevant benchmarks (Pokémon market indices, etc.)

Note: Past performance does not guarantee future results.

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