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).

github

twitter

discord

etherscan

website

Derivative exchanges

Buffer Finance

# Buffer Finance Notional trading volume Methodology

## 1. Overview

Buffer Finance notional trading volume measures the total value of binary options positions created on the Buffer Finance protocol. This metric captures the volume from options trading activity by summing the total fees paid when users create new binary options positions across Arbitrum and Polygon networks. The metric answers the business question: "What is the total notional value of options trading activity on Buffer Finance?"

## 2. Data sources

- **Blockchain events**: Parsed `Create` events from Buffer Finance binary options contracts on Arbitrum and Polygon networks
- **Contract data**: 66 different Buffer Finance binary options contract instances across two chains (48 on Arbitrum, 18 on Polygon)  
- **Token data**: Token metadata for USDC, ARB, and BFR tokens used in options trading
- **External data**: End-of-day price feeds for USD conversion of trading volumes
- **Chain data**: Arbitrum and Polygon transaction logs containing the options trading events

## 3. Step-by-step calculation

### Component A: Raw event extraction
- **Purpose**: Collect all binary options creation events from Buffer Finance contracts
- **Logic**: Extract `Create` events from 66 Buffer Finance binary options contracts across Arbitrum and Polygon. On Arbitrum, this includes USDC options contracts (numbered 1-22 plus POL variants 1-4), ARB options contracts (numbered 1-18), and BFR options contracts (numbered 1-10). On Polygon, this includes USDC options contracts (numbered 1-18). Each event contains fee information and is deduplicated using transaction hash and log index.
- **Key fields**: Extract `totalFee` as `volume_amount`, `settlementFee` as `fee_amount`, contract `address` as `account_address`, plus standard blockchain metadata

### Component B: Business classification and token mapping  
- **Purpose**: Apply consistent business categorization and map token addresses
- **Logic**: Classify all events as 'Options trading' business line, 'derivatives' market sector, and 'option' business segment. Map token addresses based on contract type: USDC contracts use `0xff970a61a04b1ca14834a43f5de4533ebddb5cc8` (Arbitrum) or `0x2791bca1f2de4661ed88a30c99a7a9449aa84174` (Polygon), ARB contracts use `0x912ce59144191c1204e64559fe8253a0e49e6548`, and BFR contracts use `0x1a5b0aaf478bf1fda7b934c76e7692d722982a6d`.
- **Key fields**: Set `business_line`, `market_sector_id`, `business_segment_id`, and `token_address` based on contract type and chain

### Component C: Time aggregation and volume normalization
- **Purpose**: Aggregate trading volumes to daily level and normalize to USD
- **Logic**: Truncate block timestamps to day boundaries and group volumes by day, chain, account address, and token address. Apply USD conversion using end-of-day price feeds and correct for token decimal precision (USDC uses 6 decimals, ARB and BFR use 18 decimals). The conversion macro handles both currency conversion and decimal normalization in a single step.
- **Key fields**: Convert `volume_amount` to USD-denominated daily volumes with proper decimal precision

### Final aggregation
- **Combining components**: All processed events are unioned together with consistent schema and business classifications
- **Currency conversion**: USD conversion and decimal correction applied via macro using end-of-day price feeds matched to event dates
- **Time aggregation**: Daily aggregation boundaries set by truncating block timestamps to day level
- **Final calculation**: The final metric represents the sum of all `totalFee` values from binary options `Create` events, converted to USD and aggregated daily. Missing days are filled with zeros to ensure complete time series coverage.

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

Total USD value of derivative contracts executed on the protocol.

Buffer FinanceBFR

Notional trading volume

Notional trading volume

Competitive landscape

Chain breakdown