# Chainflip DEX Supply-side fees Methodology

## 1. Overview

Supply-side fees is measured as the share of transaction fees distributed to service providers on Chainflip DEX. Specifically, these fees are comprised of broker fees paid by users to brokers for facilitating cross-chain swaps. This metric is utilized to assess the economic incentives and revenue generated by brokers within the Chainflip DEX ecosystem. All values are denominated in USDC and normalized to USD.

## 2. Data sources

- **Blockchain events**: `SwapExecuted` events from `swapping` pallets, and `NetworkFeeTaken` events from `liquidityPools` and `swapping` pallets, covering Chainflip Chain
- **External data**: End-of-day price feeds for USDC

## 3. Step-by-step calculation

### Component A: Historical broker fee tracking

- **Purpose**: Capture broker fees for transactions occurring before the runtime upgrade
- **Logic**: Historical broker fees are tracked by parsing `NetworkFeeTaken` events from `liquidityPools` pallets and `NetworkFeeTaken` events from `swapping` pallets during their respective active periods. For all transactions occurring prior to the runtime upgrade on September 24, 2024, broker fees are set to a constant value of zero, as broker fees were not recorded in these historical events.
- **Key fields**: `block_timestamp`

### Component B: Post-upgrade broker fee extraction

- **Purpose**: Extract broker fees from swap execution events after the runtime upgrade
- **Logic**: Post-upgrade broker fees are extracted from `SwapExecuted` events emitted by `swapping` pallets for transactions occurring on or after the runtime upgrade. The broker fee is retrieved from the seventh element of the event data payload, where the raw hexadecimal value is converted to a string integer and normalized by decimal precision to represent the value in USDC.
- **Key fields**: `block_timestamp`, `event_data`

### Component C: Aggregation and USD conversion

- **Purpose**: Combine historical and post-upgrade broker fees and convert them to USD
- **Logic**: Broker fees from both historical and post-upgrade periods are combined and aggregated on a daily basis. The aggregated daily USDC fee amounts are multiplied by the end-of-day price of USDC to calculate the final supply-side fees in USD. Daily granularity is maintained using UTC day boundaries.
- **Key fields**: `block_timestamp`, `broker_fee`

*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

Exchanges (DEX)

Chainflip operates a decentralized network of 150 validators that collectively control multi-chain vaults using threshold signature schemes (TSS). The protocol uses a Just-In-Time (JIT) AMM where liquidity providers compete to fill swap orders at the moment of execution, enabling capital-efficient cross-chain swaps. A portion of each swap fee is used to buy and burn FLIP tokens.

Chainflip is a decentralized cross-chain swap protocol that enables native asset exchanges across blockchains including Bitcoin, Ethereum, and Solana without wrapped tokens or traditional bridges. It was launched in 2023 by Chainflip Labs and uses a JIT AMM model combined with MPC-based vault technology to provide competitive pricing on cross-chain trades.

Chainflip is governed by its validator set and FLIP tokenholders. Validators stake FLIP to participate in the network and earn fees from swaps. The protocol is developed and maintained by Chainflip Labs.

Chainflip DEX

Supply-side fees

Supply-side fees

Chain breakdown