Liquidity providers deposit funds into Buffer Finance and receive trading fees from binary options traders (supply-side fees).

Buffer Finance is a non-custodial binary options exchange built on Arbitrum and Polygon. Buffer Finance was founded by an anonymous team and launched in 2021.

BFR token holders own and govern the protocol. They currently take a cut of the total trading fees paid by binary options traders (revenue).

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Buffer Finance

# Buffer Finance Fees Methodology

## 1. Overview

Buffer Finance fees represents the total settlement fees collected from binary options trading on the Buffer Finance protocol. This metric captures fees paid by users when creating binary options positions across multiple chains (Arbitrum and Polygon) and token types (USDC, ARB, BFR). The calculation aggregates settlement fees from Create events across all Buffer Finance binary options contracts, converts them to USD, and provides daily totals that answer the business question: "How much fee revenue does Buffer Finance generate from options trading activity?"

## 2. Data sources

The metric relies on the following raw data sources:

- **Blockchain events**: Parsed Buffer Finance `Create` events from binary options contracts deployed on Arbitrum and Polygon networks. These events are emitted when users create new binary options positions and contain settlement fee information.
- **Contract data**: Multiple binary options contract instances across both chains, including numbered contracts (BufferBinaryOptions1-22, USDCBufferBinaryOptions1-22, ARBBufferBinaryOptions1-18, BFRBufferBinaryOptions1-10) and specialized POL contracts on Arbitrum.
- **Token metadata**: Token information for fee token identification and decimal precision, covering USDC, ARB, and BFR tokens on their respective chains.
- **External data**: End-of-day price feeds for converting fee amounts from native tokens to USD equivalents.

## 3. Step-by-step calculation

### Component A: Fee extraction from Create events
- **Purpose**: Extract settlement fees from binary options creation events across all Buffer Finance contracts
- **Logic**: The system processes `Create` events from 58+ binary options contracts on Arbitrum and 18+ contracts on Polygon. Each contract is mapped to its corresponding fee token address (USDC `0xff970a61a04b1ca14834a43f5de4533ebddb5cc8`, ARB `0x912ce59144191c1204e64559fe8253a0e49e6548`, or BFR `0x1a5b0aaf478bf1fda7b934c76e7692d722982a6d` on Arbitrum; USDC `0x2791bca1f2de4661ed88a30c99a7a9449aa84174` on Polygon). The events are filtered for unique combinations of transaction hash, log index, and contract address to prevent duplicates.
- **Key fields**: `settlementFee` field contains the fee amount collected, `account_address` identifies the user creating the option, `block_timestamp` provides transaction timing, and contract-specific metadata enables proper token and version identification.

### Component B: Business metadata standardization  
- **Purpose**: Apply consistent business classification and dimensional attributes to fee records
- **Logic**: Each fee record is enriched with standardized business metadata including business line classification as "Options trading", market sector as "derivatives", and business segment as "option". Version information is extracted from the contract schema identifier, and chain information is derived from the deployment network. All records receive null product identification since Buffer Finance operates as a single options trading product.
- **Key fields**: `business_line` set to "Options trading", `market_sector_id` as "derivatives", `business_segment_id` as "option", `version` extracted from schema naming convention, and `chain` derived from contract deployment network.

### Component C: USD conversion and decimal correction
- **Purpose**: Convert native token fee amounts to standardized USD values with proper decimal handling
- **Logic**: Fee amounts are processed through decimal correction using token metadata to ensure proper decimal places, then converted to USD using end-of-day price feeds for the respective tokens. The conversion handles different token decimal precisions (USDC typically 6 decimals, ARB and BFR typically 18 decimals) and applies the appropriate exchange rates for each chain and token combination.
- **Key fields**: `fees` field contains the corrected and USD-converted fee amounts, `token_address` maintains the original fee token for tracking, and `timestamp` is truncated to daily grain for aggregation.

### Final aggregation
- **Combining components**: Fee records from all contracts and chains are unioned together, maintaining separate records for each fee collection event while standardizing the format and currency denomination.
- **Currency conversion**: USD conversion occurs at the individual record level using end-of-day price feeds, ensuring each fee is converted using the appropriate token price for its collection date.
- **Time aggregation**: Timestamps are truncated to daily boundaries, enabling aggregation of all fees collected within each 24-hour period across all contracts and chains.
- **Final calculation**: The metric sums all USD-converted settlement fees by day, applying a zero-fill strategy to maintain consistent daily time series even for periods with no trading activity. Chain availability filtering ensures only data from supported chains is included in the final output.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Buffer FinanceBFR

Fees

Fees

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