# Fees

Onyx is designed to flexibly handle bespoke fee structures.

The current standard `FeeHandler` implementation described below may be expanded to facilitate further use cases.

## Configuration

### Fee types

The current `FeeManager` implementation supports four fees:

* management fee (custom logic)
* performance fee (custom logic)
* entrance fee (flat %)
* exit fee (flat %)

All values are updatable.

### Fee recipients

Each fee can be directed to any arbitrary **fee recipient**.

If no fee recipient is set for entrance or exit fee (i.e., `address(0)`), the fee will be burned, effectively distributing the fee pro-rata to all share holders.

All fee recipients are updatable.

### Fee asset

All fees are distributed in the **fee asset** (e.g. USDC) set on `FeeManager`.

Fee asset is updatable.

## Settlement

Management fee and performance fee are *always* settled during the [share value update](/onyx-protocol/general-flows/share-value-update.md) flow. Management fee is settled prior to performance fee, so that performance fee takes into account the settled management fee.

Entrance and exit fees *can* be settled during deposit and redeem flows (the deposit/redeem handler decides whether to invoke the fee).

### Tracking owed fees

Settled fees are not immediately distributed, but are tracked as debts, which are asynchronously distributed at a later time.

Fee debts are stored per user, quoted in the [**value asset**](/onyx-protocol/architecture/share-value.md#value) (rather than the **fee asset**).

## Distribution

Fees are distributed in the **fee asset** set on `FeeManager`.

Owed fees are converted from the **value asset** to an amount of the **fee asset** at the time of distribution, using the **asset rate** provided by `ValuationHandler`.

There must be enough **fee asset** available in `Shares` . If there is not, then an external wallet must transfer the shortfall to `Shares`.

Distribution is triggered:

* per user
* at any time
* by an `admin` 

## Fee Settlement and Distribution Flows

See [Fee Settlement](/onyx-protocol/general-flows/fee-settlement.md)

## **Important notes for management and performance fees**

* If migrating value and shares to Onyx from another vehicle, do not add any fees until:
  1. all Onyx shares have been minted
  2. share value has been set in `ValuationHandler` 
* Updating individual fee config (e.g., a rate) does not automatically settle fees since the previous settlement. The latest config will always be used during settlements. If desired, settle fees using the previous config prior to updating.


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