Liquidity providers deposit funds into Bancor and receive trading fees from traders (supply-side fees).

Bancor is a non-custodial exchange protocol built on Ethereum. Bancor was founded by Galia Benartzi, Guy Benartzi, Eyal Hertzog, & Yudi Levi and launched in 2016.

BNT tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). Bancor's investors include DeFiance Capital, ParaFi Capital, Mechanism Capital, etc.

governance

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website

Exchanges (DEX)

Bancor

# Bancor Earnings Methodology

## 1. Overview

Bancor earnings represent the protocol's net profitability, calculated as revenue minus expenses. This metric measures the protocol's ability to generate profit from its DEX aggregator and AMM exchange operations after accounting for user incentives and compensation payments. The calculation follows the standard formula: Earnings = Revenue - Expenses, where revenue comes from trading fees and expenses consist of token incentives paid to users.

## 2. Data sources

The calculation relies on several types of blockchain data and external feeds:

- **Bancor smart contract events**: Parsed Ethereum events from Bancor v1, v2.1, and v3 contracts including trading events (`TokensTraded`, `Conversion`), liquidity events (`addLiquidity`, `removeLiquidity`, `withdraw`), and reward events (`RewardsClaimed`, `RewardsStaked`)
- **Token transfer events**: BNT and vBNT `Transfer`, `Issuance`, and `Destruction` events to track token minting, burning, and transfers
- **Network configuration events**: `NetworkFeeUpdated` and `NetworkFeePPMUpdated` events that set protocol fee tier percentages
- **End-of-day token price feeds**: USD price data for converting token amounts to dollar values
- **Token metadata**: Token symbols, decimal places, and contract addresses for proper amount calculations

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculate protocol revenue from trading fees collected on the Bancor DEX
- **Logic**: Start with all trading events from Bancor contracts across versions. For v3, extract fee amounts from `TokensTraded` events using `targetFeeAmount` and `bntFeeAmount` fields. For v2.1, use `conversionFee` amounts from `Conversion` events. Handle native ETH by converting to WETH address. Adjust amounts for token decimals and convert to USD using end-of-day prices. Apply protocol fee tier percentages to determine the protocol's share of total fees collected
- **Key fields**: `targetFeeAmount`, `bntFeeAmount`, `conversionFee` for raw fee amounts, `sourceToken` and `targetToken` for traded pairs

### Component B: Expenses calculation  
- **Purpose**: Calculate total expenses from user incentives and compensation payments
- **Logic**: Combine two expense categories - liquidity mining rewards and impermanent loss compensation. For liquidity rewards, capture BNT payments from staking and standard reward claim events filtered to specific incentive distribution accounts. For impermanent loss compensation, identify BNT tokens minted during withdrawal transactions by joining withdrawal functions with `Issuance` events on the same transaction hash. For v2.1 withdrawals, verify the withdrawer previously deposited tokens. For v3 withdrawals, ensure no vBNT burning occurs and transfers go to the vault address. Convert all BNT amounts to USD values
- **Key fields**: `amount` from reward events, minted BNT `amount` from issuance events, withdrawal recipient addresses

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently then subtracted (Revenue - Expenses = Earnings) using the standard earnings calculation macro
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds, with proper decimal adjustment based on token metadata  
- **Time aggregation**: All events are aggregated to daily boundaries using timestamp truncation, with forward-fill applied for missing dates to ensure continuous time series
- **Final calculation**: Daily earnings equal the protocol's share of trading fees minus all token incentives and compensation paid to users, expressed in USD

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

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

BancorBNT

Earnings

Earnings

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