Lenders deposit funds into BENQI and receive interest payments from borrowers (supply-side fees).

BENQI is a non-custodial lending protocol built on Avalanche. BENQI was founded by an international team of software developers and launched in 2021.

 QI tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue). BENQI’s investors include Dragonfly Capital, Mechanism Capital, Spartan, etc.

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BENQI

# BENQI Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of interest payments that flow to liquidity providers (depositors) in the Benqi lending protocol on Avalanche. This metric measures the value accrued to users who supply assets to Benqi markets, calculated as the complement of the protocol's revenue share from total interest accrued on loans.

## 2. Data sources

- **Blockchain events**: Parsed Avalanche `AccrueInterest` events from Benqi v1 lending market contracts, capturing when interest accumulates on outstanding loans
- **Configuration events**: Parsed Avalanche `NewReserveFactor` events from Benqi v1 market contracts, recording changes to the protocol's revenue share percentage
- **Token metadata**: Token symbol mappings and decimal specifications for Benqi market tokens and account contracts
- **External data**: End-of-day token price feeds for USD conversion
- **Market definitions**: Predefined allowlist mapping Benqi account addresses to their underlying token addresses

## 3. Step-by-step calculation

### Component A: Interest accrual extraction
- **Purpose**: Capture all interest accumulation events from Benqi lending markets
- **Logic**: Extract `AccrueInterest` events from Benqi v1 market contracts on Avalanche, filtering for events that contain the `interestAccumulated` field representing newly accrued interest amounts. Each event includes the market account address, timestamp, and raw interest amount in token-specific decimal format.
- **Key fields**: `block_timestamp` for timing, `address` for market identification, `interestAccumulated` for raw interest amounts

### Component B: Market mapping
- **Purpose**: Connect market account addresses to underlying token information
- **Logic**: Join interest accrual events with a predefined allowlist of Benqi markets that maps account contract addresses to underlying token addresses. This mapping is necessary because Benqi markets are not factory-created and require manual identification. Add token symbols from token metadata for both the underlying token and the market account contract.
- **Key fields**: `account_address` for market contracts, `token_address` for underlying assets, `token_symbol` and `account_name` for identification

### Component C: Reserve factor application
- **Purpose**: Determine the protocol's revenue share percentage for calculating the split between protocol and supply-side fees
- **Logic**: Join market data with `NewReserveFactor` events that record changes to each market's reserve factor over time. Use lead timestamps to create time windows where each reserve factor applies, ensuring the correct rate is used for each interest accrual event. Convert the reserve factor from its raw 18-decimal format to a percentage (divide by 10^18).
- **Key fields**: `newReserveFactorMantissa` for the protocol's share, `block_timestamp` for timing, `lead_timestamp` for determining applicable periods

### Component D: Decimal correction
- **Purpose**: Normalize interest amounts to standard decimal format
- **Logic**: Apply token-specific decimal corrections to the raw `accrued_interest` amounts using each token's decimal specification. This ensures amounts are properly scaled regardless of the underlying token's decimal implementation.
- **Key fields**: `accrued_interest` corrected to standard format based on token decimals

### Final aggregation
- **Combining components**: Calculate supply-side fees using the formula: `fees_supply_side = (1 - reserve_factor) × accrued_interest`. The reserve factor represents the protocol's share, so (1 - reserve_factor) gives the portion allocated to liquidity providers. Apply time-based logic to ensure reserve factors are only applied during their valid periods using timestamp comparisons.
- **Currency conversion**: Convert token amounts to USD using end-of-day price feeds, applying the conversion after decimal correction but before final aggregation
- **Time aggregation**: Truncate timestamps to daily boundaries and sum all supply-side fees for each token market per day
- **Final calculation**: The daily supply-side fees represent the total value flowing to liquidity providers in each Benqi market, expressed in USD and aggregated by day, chain, and token address

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

Portion of fees distributed to service providers or supply-side participants.

BENQIQI

Supply-side fees

Supply-side fees

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