DAT provider economics, in plain English.
A working glossary for the terms that frequently determine the real cost, flexibility and governance profile of a digital-asset treasury manager or adviser agreement.
AUM / asset-based fee
A recurring fee calculated as a percentage of a defined asset base. The denominator matters: treasury NAV, account size, managed assets, market capitalization or another measure can produce very different dollar outcomes.
Performance fee
Compensation linked to gains or another performance measure. A useful comparison identifies what counts as performance, whether gains must be realized, whether losses carry forward and how often the fee is measured or settled.
High-water mark
A mechanism intended to prevent repeated performance-fee collection on the same recovered value. The exact definition, reset rules and measurement period should be read from the executed agreement rather than inferred from the label.
Hurdle
A threshold that must be exceeded before performance compensation is earned. Hurdles can be absolute, benchmark-relative or absent altogether.
Equity / warrant consideration
Shares, preferred securities, warrants or other equity-linked compensation issued to a provider or adviser. Economic comparison should capture grant size, exercise price, vesting, forfeiture, lock-up and whether future financings create additional rights.
Initial term
The first contractual period before ordinary renewal or expiration mechanics apply. A low annual fee inside a very long initial term can create a very different risk profile from the same fee inside a short mandate.
Automatic renewal
A mechanism that extends the agreement unless one party gives notice within a defined window. The practical issue is not just whether renewal is automatic, but how early notice must be given and what happens if the window is missed.
Termination for convenience / no-cause termination
A right to end the agreement without proving breach or another specified cause. The right may still be economically constrained by notice periods, consent requirements, accelerated fees, liquidated damages or other surviving compensation.
Remaining-term exposure
The economic obligation that may survive an early exit and is tied to fees or compensation that would otherwise have been earned during the rest of the contractual term.
Liquidated damages
A contractually specified amount or formula payable after a defined event, often including termination. The label alone does not establish enforceability or fairness; the research task is to identify the formula and compare public outcomes without giving a legal opinion.
Related party
A provider relationship involving overlapping ownership, management, board or other disclosed relationships. Related-party status is a factual governance dimension, not by itself a conclusion that the arrangement is improper or off-market.
Consent right
A contractual right that makes a specified company action subject to another party's prior approval. In provider agreements this can matter for termination, amendments, asset-manager changes, investment guidelines or governance actions.
Internalization
Moving a provider function inside the company rather than continuing to outsource it. Public internalizations are useful outcome comparators because they show that provider economics can be tested against an operational replacement path, not only against another external manager.
Current-version verification
The process of determining which executed agreement, amendment or restatement currently governs the relationship. DAT Provider Research treats this as a prerequisite to benchmarking.
Realized outcome
A public event that actually changed the provider relationship: fee reset, amendment, negotiated termination, internalization, settlement, litigation, transfer-control change or another disclosed result. Realized outcomes are not interchangeable with theoretical contract terms.
Use the glossary with the source record
Definitions help organize the analysis, but the executed agreement controls the factual mechanics. See the public methodology and outcome case notes for examples.