The 1inch Aggregation Protocol routes users' trades through the most efficient path for a token swap and aggregates multiple non-custodial exchanges.

The 1inch Network unites multiple decentralized protocols built on Ethereum and other blockchains. This dashboard tracks the 1inch Aggregation Protocol, which is a non-custodial DEX aggregator. 1inch was founded by Sergej Kunz & Anton Bukov and launched in 2019.

The 1inch Network is governed by 1inch DAO – a decentralized autonomous organization. Voting on the DAO is performed through the 1INCH token, a governance token, that was initially distributed to the community of 1inch Network users in late 2020. They currently do not take a cut of the total trading fees paid by traders (revenue). 1inch's investors include ParaFi Capital, FTX Exchange, Pantera Capital, etc.

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# 1inch Earnings Methodology

## 1. Overview

The 1inch earnings metric represents the net profit of the 1inch protocol by calculating the difference between revenue (fees collected) and expenses (liquidity incentives distributed). This metric answers the fundamental business question: "How much profit is the 1inch protocol generating after accounting for its operational costs?" The calculation follows a straightforward approach: earnings = revenue - expenses, where revenue comes from trading fees collected in treasury addresses and expenses come from 1INCH token distributions through liquidity incentive programs.

## 2. Data sources

The calculation relies on several raw blockchain data sources:

- **Token transfer events**: Parsed Ethereum ERC20 `Transfer` events to capture fee collections flowing into 1inch treasury addresses
- **Transaction traces**: Ethereum transaction traces to capture ETH transfers to treasury addresses that represent fee collections
- **Smart contract events**: Parsed `Claimed` events from the 1inch `GasRefundProgram` contract to track liquidity incentive distributions
- **End-of-day price feeds**: Token price data used to convert all amounts to USD values for consistent calculation
- **Token metadata**: Information about token decimals and other properties needed for accurate amount calculations

## 3. Step-by-step calculation

### Component A: Revenue calculation (fee collections)

- **Purpose**: Calculate total revenue from trading fees collected by the 1inch protocol
- **Logic**: Track inflows to two 1inch treasury addresses using different filtering approaches. For treasury address `0xdd9f24efc84d93deef3c8745c837ab63e80abd27` (active March 10, 2021 to November 14, 2021), capture all ERC20 token transfers and ETH transfers while excluding transfers from Binance address `0x28c6c06298d514db089934071355e5743bf21d60` and denylisted tokens. For treasury address `0x7951c7ef839e26f63da87a42c9a87986507f1c07` (active from October 11, 2021), use an allowlist approach that only includes transfers of six major tokens: USDC, USDT, 1INCH, WETH, DAI, and WBTC, while excluding specific denylisted transactions and Binance transfers. Convert all collected amounts to USD using end-of-day price feeds and correct for token decimals.
- **Key fields**: `block_timestamp` for daily aggregation, `from_address` for sender identification, `to_address` for treasury matching, `token_address` for token identification, `value` for transfer amount, `transaction_hash` for deduplication

### Component B: Expense calculation (liquidity incentives)

- **Purpose**: Calculate total expenses from 1INCH token distributions through liquidity incentive programs
- **Logic**: Monitor `Claimed` events from the 1inch `GasRefundProgram` smart contract to identify when users receive 1INCH tokens as gas refund incentives. Match the claiming account addresses with the liquidity incentive accounts dimension table to classify the program type (currently only "Gas Refund Program" is active). Extract the incentive amount from the `amount` field in the contract events. Convert 1INCH token amounts to USD using end-of-day price feeds and correct for token decimals.
- **Key fields**: `block_timestamp` for daily aggregation, `address` for recipient identification, `amount` for incentive amount, `transaction_hash` and `log_index` for event deduplication

### Final aggregation

- **Combining components**: Aggregate both revenue and expense components daily by truncating timestamps to day boundaries and summing USD values for each day
- **Currency conversion**: Apply end-of-day USD price conversion to all token amounts using the `convert_to_usd_and_correct_decimals` macro, which handles both price conversion and decimal normalization
- **Time aggregation**: Group all transactions by day using timestamp truncation, ensuring consistent daily boundaries across revenue and expense calculations  
- **Final calculation**: Calculate earnings by subtracting daily aggregated expenses from daily aggregated revenue using the `calculate_earnings` macro, then standardize the output format, validate data integrity, and fill any missing days with zero values using the `finalize_metric_earnings` macro

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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