# Chainflip Lending Supply-side fees Methodology

## 1. Overview

Supply-side fees is defined as the share of fees generated by Chainflip Lending that is distributed to liquidity providers and other supply-side participants. These fees are distributed to compensate for the provision of assets to the lending pools and the facilitation of lending operations. This metric is utilized to evaluate the economic incentives provided to supply-side participants on Chainflip Lending. Cross-product aggregation details, including fees from the Chainflip DEX, are documented in the project-level methodology.

## 2. Data sources

- **Blockchain events**: `InterestTaken`, `OriginationFeeTaken`, and `LiquidationFeeTaken` events from `lendingPools` contracts on Chainflip Chain
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Lending interest fee extraction

- **Purpose**: Supply-side fees from interest taken on active loans are captured.
- **Logic**: `InterestTaken` events are parsed from `lendingPools` contracts. The raw supply-side fee amount is calculated by summing the first and third fields of the event data, which are allocated to the supply side. These raw amounts are mapped to their respective loans using loan identifiers for asset identification.
- **Key fields**: `loan_id`, `fee_supply_amount`

### Component B: Lending origination and liquidation fee extraction

- **Purpose**: Supply-side fees from loan originations and liquidations are captured.
- **Logic**: `OriginationFeeTaken` and `LiquidationFeeTaken` events are parsed from `lendingPools` contracts. The raw supply-side fee amount is extracted from the second field of the event data, which is allocated to the supply side. These events are joined with loan creation records for asset identification.
- **Key fields**: `loan_id`, `supply_amount`

### Component C: USD conversion and aggregation

- **Purpose**: Fee amounts are normalized by asset decimals and converted to USD.
- **Logic**: The raw supply-side fee amounts from interest, origination, and liquidation events are aggregated by day and asset. These aggregated raw values are normalized by the decimal precision of each asset using asset metadata. The normalized values are then multiplied by end-of-day asset prices for the calculation of daily supply-side fees in USD. Daily boundaries are defined using UTC.
- **Key fields**: `timestamp`, `token_address`, `supply_fees`, `price_usd`

*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

Lending

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 Lending

Supply-side fees

Supply-side fees

Chain breakdown