> ## Documentation Index
> Fetch the complete documentation index at: https://docs.shores.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Fees

> Where the yield comes from, and who pays which fee.

Shores' yield comes from one place: interest paid by borrowers on loans secured by real property. Owners pay the yield.

Brokers in Latin America and South Florida are clearing 13–15% today, so the 8% net is just the residue after fees and the split.

```mermaid theme={null}
flowchart LR
    A["Borrower rate<br/>13–15%"] --> B["Fees, servicing<br/>and reserve"] --> C["Net to stakers<br/>8% target"]
```

<Info>
  These are the planned fees. Final rates are set in each vault's terms. \[TBD: final fee schedule per vault]
</Info>

## Paid by borrowers

| Fee | Planned rate | When |
| - | - | - |
| Interest | 13–15% a year | Through the loan; the source of depositor yield |
| Origination points | \[TBD: points] | At funding |
| Extension fee | \[TBD] | If a loan is extended |

## Charged to the vault (planned)

| Fee | Planned rate | Notes |
| - | - | - |
| Management fee | 1.00% a year | Charged on vault assets before the yield is shared |
| Performance fee | 15% of net income above an 8% hurdle | High-water mark, no catch-up |
| Servicing | Cost-plus \[TBD: rate] | Pays for loan servicing |

**Fee step-down (planned).** In any year when depositors' yield after the full management fee would fall below the hurdle, the management fee is halved.

## Where protocol fees go (planned)

| Share | Destination |
| - | - |
| 50% | Shores operating company |
| 30% | Shores Foundation |
| 20% | First-loss reserve inside the vault |

Trading shUSD on the secondary market earns Shores no fee.


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