Lenders deposit funds into Compound and receive interest payments from borrowers (supply-side fees).

Compound is a non-custodial lending protocol built on Ethereum. Compound was founded by Robert Leshner & Geoffrey Hayes and launched in 2017.

 COMP tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue). Compound’s investors include a16z, Paradigm, Polychain, etc.

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Compound

# Compound Average fees per user (AFPU) Methodology

## 1. Overview

Average fees per user (AFPU) measures the average daily fee contribution per active user of the Compound protocol. This metric answers the question "How much in fees does each active user generate on average?" by dividing total daily fees by daily active user count. The calculation combines lending fees from both Compound v2 (Ethereum) and v3 (Ethereum, Arbitrum, Base, Polygon) protocols, providing insight into user monetization efficiency across the protocol ecosystem.

## 2. Data sources

The AFPU calculation uses several underlying data sources:

- **Compound v2 blockchain events**: Parsed `AccrueInterest` events from `CEther`, `CErc20`, and `CErc20Delegator` contracts on Ethereum, tracking interest accumulation
- **Compound v2 configuration events**: Parsed `NewReserveFactor` events from `CEther`, `CErc20`, and `CErc20Delegator` contracts on Ethereum, tracking reserve factor changes
- **Compound v3 state data**: Daily snapshots containing supply rates, borrow rates, base supply/borrow indices, and total supply/borrow base amounts
- **Compound v2 lending events**: Parsed `Borrow`, `Mint`, `Redeem`, and `RepayBorrow` events from Ethereum lending contracts
- **Compound v3 lending events**: Parsed `SupplyCollateral`, `Supply`, `WithdrawCollateral`, and `Withdraw` events from Comet contracts on Ethereum, Arbitrum, Base, and Polygon
- **End-of-day token price feeds**: Daily USD prices for all tokens involved in lending markets
- **Token metadata**: Token symbols, decimal places, and contract addresses for proper normalization
- **Market configuration data**: Mapping between cToken contracts and underlying token addresses for both v2 and v3 markets

## 3. Step-by-step calculation

### Component A: Compound v2 fees calculation
- **Purpose**: Calculate protocol revenue and supply-side fees from Compound v2 lending markets
- **Logic**: Process `AccrueInterest` events from all v2 lending contracts on Ethereum. For each accrual event, retrieve the applicable reserve factor by matching the contract address and finding the most recent `NewReserveFactor` event before the accrual timestamp. Split the accrued interest using the reserve factor: protocol revenue equals `reserve_factor * accrued_interest`, and supply-side fees equal `(1 - reserve_factor) * accrued_interest`. Only apply reserve factors when the accrual event timestamp falls within the valid time range for that reserve factor setting.
- **Key fields**: `interestAccumulated` from accrual events, `newReserveFactorMantissa` from reserve factor events (scaled by 10^18), contract addresses for matching, and block timestamps for temporal matching

### Component B: Compound v3 fees calculation
- **Purpose**: Calculate protocol revenue and supply-side fees from Compound v3 lending markets
- **Logic**: Use daily state snapshots containing market parameters for v3 markets across all chains. Calculate supply-side fees as `supply_rate * (baseSupplyIndex * totalSupplyBase)` and protocol revenue as `borrow_rate * (baseBorrowIndex * totalBorrowBase) - supply_rate * (baseSupplyIndex * totalSupplyBase)`. Convert rates from per-second to daily by multiplying by 86400 seconds. Scale indices by dividing by 10^15. Set negative revenue values to zero as they represent protocol expenses rather than income.
- **Key fields**: `supply_rate` and `borrow_rate` (scaled per second), `baseSupplyIndex` and `baseBorrowIndex` (scaled by 10^15), `totalSupplyBase` and `totalBorrowBase` amounts

### Component C: Fee aggregation and normalization
- **Purpose**: Combine v2 and v3 fees and convert to USD
- **Logic**: Union the v2 and v3 fee calculations. For each fee amount, correct for token decimals by dividing by 10^decimals where decimals come from token metadata. Convert to USD by multiplying the decimal-corrected amount by the end-of-day USD price for the corresponding token and date. Sum protocol revenue and supply-side fees to get total fees. Aggregate daily by summing all fee amounts across all markets and chains for each day.
- **Key fields**: Raw fee amounts, token `decimals` from metadata, `price_usd` from daily price feeds, token addresses for matching prices

### Component D: Daily active user counting
- **Purpose**: Count distinct users interacting with Compound protocols daily
- **Logic**: Track user interactions from lending events across both v2 and v3 protocols on all supported chains. For v2 on Ethereum, capture user addresses from `Borrow`, `Mint`, `Redeem`, and `RepayBorrow` events, extracting addresses from `borrower`, `minter`, `redeemer`, and `payer` parameters respectively. For v3 on Ethereum, Arbitrum, Base, and Polygon, capture addresses from `SupplyCollateral` and `Supply` events (`dst` parameter) and `WithdrawCollateral` and `Withdraw` events (`src` parameter). Use hyperloglog (HLL) data structure to efficiently count distinct user addresses across all chains and interaction types for each day.
- **Key fields**: User address parameters (`borrower`, `minter`, `redeemer`, `payer`, `dst`, `src`), block timestamps for daily grouping, chain identifiers

### Final aggregation
- **Combining components**: The fees component provides total daily fees in USD by summing all protocol revenue and supply-side fees across v2 and v3 markets. The user component provides daily active user counts using HLL extraction to get the final distinct count across all chains and interactions.
- **Currency conversion**: All fee amounts are converted to USD using end-of-day price feeds matched by token address, chain, and date before aggregation
- **Time aggregation**: Both fees and users are aggregated to daily granularity using timestamp truncation to day boundaries, ensuring consistent time alignment between numerator and denominator
- **Final calculation**: AFPU equals total daily fees in USD divided by daily active user count, computed using the `calculate_arpu` macro which handles the division and null value management

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

CompoundCOMP

Average fees per user (AFPU)

Average fees per user (AFPU)

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