yvAAVE is the deposit token issued by Yearn Vault, a yield farming DeFi protocol invented by Yearn Finance. By depositing AAVE into the vault, users received yvWETH, an interest bearing token represents the vaule of deposited AAVE and interest rate gained from multiple strategies.
yVaults are like savings accounts for your crypto assets. They accept your deposit, then route it through strategies which seek out the highest yield available in DeFi.
Performance Fee: Deducted from yield earned every time a vault harvests a strategy.
Management Fee: Flat rate taken from vault deposits over a year. The fee is extracted by minting new shares of the vault, thereby diluting vault participants. This is done at the time of harvest, and calculated based on time since the previous harvest.
The old structure used before the changes brought by YIP-69 was 20% performance fees and 2% management fees, but this has changed and vaults now have a dynamic fee structure. Single asset vaults have no management fee. Fee values for all yVaults can be checked in real-time at yearn.watch
Example YFI yVault fee structure at the time of writing:
On the yearn.finance user interface, yield is displayed as net APY. This means that both fees and compounding returns are taken into consideration in the rates presented. Since harvests don't occur on a set basis, yield is estimated based on historical data. For more information, see How to Understand yVault ROI
