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.

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Chainflip

# Chainflip Earnings Methodology

## 1. Overview

Earnings is defined as the net value a project retains after subtracting all expenses from its revenue. For Chainflip, this metric is calculated by subtracting token incentives (expenses) from protocol revenue across Chainflip Chain, Chainflip DEX, and Chainflip Lending. Protocol revenue is derived by subtracting supply-side fees from total fees. On-chain profitability is reflected by this metric, though true operating costs may be understated if they are not reported on-chain. All values are converted to USD using end-of-day price feeds.

## 2. Data sources

- **Blockchain events**: `TransactionFeePaid` events from `transactionPayment` contracts, `NetworkFeeTaken` and `SwapExecuted` events from `liquidityPools` and `swapping` contracts, `InterestTaken`, `OriginationFeeTaken`, `LiquidationFeeTaken`, and `LoanCreated` events from `lendingPools` contracts, and `FlipMinted` events from `flip` contracts, covering Chainflip Chain
- **External data**: End-of-day price feeds for FLIP, USDC, and other supported assets, and historical authority emission rates from off-chain RPC snapshots

## 3. Step-by-step calculation

### Component A: Chainflip Chain fee collection

- **Purpose**: Capture transaction fees paid on the Chainflip Chain
- **Logic**: `TransactionFeePaid` events from `transactionPayment` contracts are parsed to extract the transaction fee amount and tip. These values are summed to calculate total gas fees, normalized by the asset's decimal precision, and converted to USD using end-of-day price feeds.

### Component B: Chainflip DEX fee collection

- **Purpose**: Capture swap and broker fees from Chainflip DEX
- **Logic**: Swap fees are extracted from `NetworkFeeTaken` and `SwapExecuted` events emitted by `liquidityPools` and `swapping` contracts. For historical events, network fees are parsed from `NetworkFeeTaken` events. For newer events, both network fees and broker fees are extracted from `SwapExecuted` events. Broker fees are classified as supply-side fees, while network fees are retained by the protocol. All fees are normalized by decimal precision and converted to USD using end-of-day price feeds.

### Component C: Chainflip Lending fee collection

- **Purpose**: Capture interest, origination, and liquidation fees from Chainflip Lending
- **Logic**: Fees are extracted from `InterestTaken`, `OriginationFeeTaken`, and `LiquidationFeeTaken` events emitted by `lendingPools` contracts. Loan assets are identified by joining these events with `LoanCreated` events. Total fees are calculated as the sum of supply-side fees (allocated to liquidity providers) and protocol fees. All amounts are normalized by decimal precision and converted to USD using end-of-day price feeds.

### Component D: Token incentives tracking

- **Purpose**: Calculate the value of FLIP emissions distributed as incentives
- **Logic**: For periods prior to October 2025, historical authority emissions are reconstructed using block-by-block emission rates from off-chain RPC snapshots. For periods starting in October 2025, emissions are extracted directly from `FlipMinted` events emitted by `flip` contracts. The daily minted FLIP amount is aggregated, normalized by decimal precision, and converted to USD using end-of-day price feeds.

### Component E: Revenue and earnings aggregation

- **Purpose**: Combine all components to calculate net earnings
- **Logic**: Total fees are aggregated across Chainflip Chain, Chainflip DEX, and Chainflip Lending. Supply-side fees (consisting of DEX broker fees and Lending supply fees) are subtracted from total fees to determine protocol revenue. Expenses are defined as 100% of the USD value of token incentives. Finally, earnings are calculated by subtracting expenses from protocol revenue.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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