# Bifrost Liquid Staking Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the portion of total fees generated by Bifrost Liquid Staking that is distributed to service providers and external participants rather than being retained by the protocol treasury. These fees primarily consist of hosting fees and commissions paid to service providers that facilitate the minting, redemption, and maintenance of liquid staking voucher assets (vTokens). The metric represents the direct cost of incentivizing the infrastructure and channel partners necessary for the operation of the liquid staking protocol.

## 2. Data sources

- **Blockchain events**: `HostingFeeCharged` events from `slp` contracts, `ChannelClaimableCommissionUpdated` events from `channelCommission` contracts, `Payout` events from `systemStaking` contracts, and `Redeemed` and `Minted` events from `vtokenMinting` contracts on Bifrost Substrate
- **External data**: End-of-day price feeds for underlying staked assets and vToken price ratios

## 3. Step-by-step calculation

### Component A: Hosting fee and commission extraction

- **Purpose**: Captures the base fee amounts generated from liquid staking operations and service provider commissions.
- **Logic**: Fee data is parsed from multiple pallets on Bifrost Substrate. `HostingFeeCharged` events are extracted from `slp` contracts to identify base hosting costs. Commission updates are tracked via `ChannelClaimableCommissionUpdated` events from `channelCommission` contracts, while staking distributions are captured from `Payout` events in `systemStaking` contracts. Additionally, redemption-specific fees are parsed from `Redeemed` events in `vtokenMinting` contracts.
- **Key fields**: `fees`, `currency_key`, `currency_index`, and `event_data`.

### Component B: Asset mapping and vToken valuation

- **Purpose**: Maps internal currency identifiers to market assets and determines the relative value of liquid staking vouchers.
- **Logic**: Internal currency keys and indices are joined against a token mapping registry to identify the specific asset (e.g., DOT, GLMR, ASTR). For voucher assets (vTokens), a price ratio is calculated by comparing `token_amount` to `v_token_amount` within `Minted` events from `vtokenMinting` contracts. These ratios are processed using a fill-forward mechanism to ensure continuous valuation data across all days.
- **Key fields**: `token_amount`, `v_token_amount`, and `vtoken_price_ratio`.

### Component C: Supply-side allocation logic

- **Purpose**: Distinguishes between the total fee paid and the portion retained as protocol revenue.
- **Logic**: For hosting fees captured from the `slp` contract, total fees are calculated by applying a 10x multiplier to the base fee amount, while protocol revenue is recorded as the base fee amount. The supply-side portion is derived as the difference between these values. For channel commissions, system staking payouts, and redemption fees, total fees and revenue are recorded as equal values in the intermediate layer, with the final supply-side metric calculated as the aggregate difference across all liquid staking fee components.

### Component D: USD conversion and final aggregation

- **Purpose**: Normalizes all fee components into a common currency (USD) and aggregates them by time and product.
- **Logic**: All extracted fee amounts are normalized by the decimal precision defined in the asset metadata. Normalized values are multiplied by the daily exchange rate between the voucher and the underlying asset where applicable, and then converted to USD using end-of-day price feeds. Supply-side fees are calculated as `fees - revenue`. Values are aggregated to a daily grain using UTC day boundaries.

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

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

Supply-side fees

Liquid staking

Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Bifrost is the Staking Yield Layer app-chain for stablecoins, RWAs, and DeFi, powered by the Polkadot Relay chain.

BNC holders own and govern the protocol. Bifrost’s investors include OKX Ventures, Long Hash Ventures, etc.

Bifrost Liquid Staking

Archived

Supply-side fees

Supply-side fees

Chain breakdown