# Onboarding and Offboarding Contributions

In many DeFi vaults, the arrival or departure of large amounts of liquidity can create hidden costs for existing participants. IPOR Fusion provides the infrastructure for **Onboarding and Offboarding Contributions**—mechanisms designed to protect long-term depositors and ensure the vault's health.

Unlike traditional protocol fees, these contributions are not kept by a central authority or DAO. Instead, they are distributed directly back to the vault's internal liquidity, effectively benefiting all remaining share holders.

### Why are these contributions necessary?

When a user joins or leaves a vault, the vault's composition changes. This may require the Alpha to rebalance assets across various protocols, which involves:

* **Slippage and Swap Fees:** The price impact of moving large volumes of assets through decentralized exchanges, as well as the fundamental trading fees charged by those protocols.
* **Yield Dilution:** If a user enters a vault right before a significant yield realization, they would "dilute" the profit meant for those who held through the risk period.

Onboarding and Offboarding contributions ensure that the person causing these actions covers the associated costs, rather than the existing liquidity providers.

### Onboarding Contributions

When you deposit assets into an IPOR Fusion vault, an **Onboarding Contribution** may be applied.

#### How it works:

1. You deposit an amount of underlying assets (e.g., USDC).
2. A small percentage (defined by the vault's configuration) is calculated as a contribution.
3. The remaining assets are used to mint your vault shares.
4. The "contribution" amount remains within the vault, instantly increasing the **Total Assets** value for every existing share.

**Result:** The Joiner pays a small entry premium, and the Stayers see a slight increase in their share price.

### Offboarding Contributions

Similarly, when you withdraw assets from a vault, an **Offboarding Contribution** may be applied to the transaction.

#### How it works:

1. You request a withdrawal or redemption of your shares.
2. The vault calculates the asset value of those shares.
3. A small percentage is deducted from the outgoing amount.
4. These assets stay in the vault or the shares are burned, which increases the proportional ownership of the remaining participants.

**Result:** The Leaver covers the potential liquidity extraction costs, and the Stayers are compensated for the cost of rebalancing.

### Individual Vault Management

As a neutral infrastructure, IPOR Fusion allows individual vaults to determine their own contribution policies. These are managed by **Atomists**, who decide the specific amounts for onboarding or offboarding contributions based on the vault's specific strategy and goals.

By implementing these contributions, a vault can achieve:

* **Value Accrual:** Every time a user joins or leaves, the internal value of the vault's assets is redistributed, resulting in a marginal accrual for existing holders.
* **Fairness:** Users who move in and out of the vault frequently contribute more to the vault's pool than those who remain deposited for long periods.
* **Sustainability:** The vault can cover the operational costs of rebalancing liquidity without eating into the organic yield generated by the underlying strategies.

> Tip:
>
> You can always check the current contribution rates in the **Vault Info** section of the IPOR Fusion interface before committing your transaction.

Watch the short video below to learn more.  

{% embed url="<https://youtu.be/Ed7J_1Oeltg>" %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.ipor.io/fusion-for-liquidity-providers/user-guide/vault-fees/onboarding-and-offboarding-contributions.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.