Liquidity providers (LPs) deposit funds into Convex Finance and receive a return on investment (supply-side fees).

Convex Finance is an asset management and staking protocol built on Ethereum. Convex Finance launched in May 2021.

CVX tokenholders own and govern the protocol. They currently take a cut of the total yield generated (revenue).

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Convex Finance

# Convex Finance Earnings Methodology

## 1. Overview

Earnings represents the net profit generated by Convex Finance, calculated as total revenue minus total expenses on a daily basis. This metric measures the protocol's financial performance by capturing the revenue generated from yield aggregation services and subtracting the costs of token incentives paid to users. The calculation combines revenue from multiple yield sources across Ethereum, Arbitrum, and Polygon with expenses from CVX token emissions.

## 2. Data sources

The calculation relies on several raw blockchain data sources:

- **Token transfer events**: Parsed `Transfer` events from Ethereum, Arbitrum, and Polygon for tracking yield flows between protocol addresses and CVX token minting
- **Protocol addresses**: Specific smart contract addresses including the Booster contract, Voter Proxy contracts, Curve addresses, and Fee Deposit contracts across multiple chains
- **Token contracts**: CRV tokens on Ethereum/Arbitrum/Polygon, CVX token on Ethereum, FPIS token, FXS token, and triCRV token addresses
- **End-of-day price feeds**: Token price data for USD conversion of all yield and expense amounts
- **Token metadata**: Decimal precision information for proper token amount normalization

## 3. Step-by-step calculation

### Component A: Revenue from yield aggregation

- **Purpose**: Calculate Convex Finance's share of yields generated from various DeFi protocols
- **Logic**: Track token transfers between specific protocol addresses to capture different types of yields. For Curve incentives, monitor CRV token transfers from Voter Proxy contracts to the Booster contract on Ethereum, Arbitrum, and Polygon. For Curve trading fees, track triCRV token transfers from the Booster to the Reward Pool contract. For Frax incentives, monitor FPIS transfers from the Frax Voter Proxy to Fee Deposit contracts and FXS transfers to multiple Fee Deposit addresses. Apply protocol-specific yield share percentages to determine Convex's portion of each yield type.
- **Key fields**: Block timestamp for daily aggregation, transaction hash and log index for uniqueness, token addresses for price lookup, transfer amounts (`value` field), and source/destination addresses for yield classification

### Component B: Protocol yield share application

- **Purpose**: Apply Convex Finance's ownership percentage to each yield source
- **Logic**: Join yield data with predefined protocol yield shares. Curve incentives and Frax FXS incentives use 17% share, while Curve trading fees and Frax FPIS incentives use 100% share. For FXS incentives, perform reverse calculation by dividing observed protocol yield by 0.17 to determine total yield, recognizing that Convex receives only the protocol portion.
- **Key fields**: Account name for yield source classification (`account_name`), protocol yield share percentage (`protocol_yield_share`), and calculated revenue amount

### Component C: Expenses from token incentives  

- **Purpose**: Calculate the cost of CVX token incentives distributed to users
- **Logic**: Monitor CVX token minting events by tracking transfers from the null address (0x0000000000000000000000000000000000000000) to any recipient address. These transfers represent new CVX tokens created and distributed as rewards. Include all minting events from the rewards start date of May 17, 2021 onward.
- **Key fields**: CVX token address (`0x4e3fbd56cd56c3e72c1403e103b45db9da5b9d2b`), minted token amounts (`value` field), and mint timestamps for daily aggregation

### Component D: Currency conversion and aggregation

- **Purpose**: Convert all token amounts to USD and aggregate to daily totals
- **Logic**: Apply the currency conversion process to both revenue and expense components. Use end-of-day token prices to convert native token amounts to USD values. Correct for token decimal precision to ensure proper amount calculation. Aggregate all revenue sources and expense amounts by day, maintaining separation by chain and business classification fields.
- **Key fields**: Converted USD amounts, daily timestamp boundaries (`timestamp_trunc` to day), chain identifiers, and business classification fields

### Final aggregation

- **Combining components**: Join the daily revenue totals with daily expense totals using the standard earnings calculation macro. Subtract total expenses from total revenue for each day to produce net earnings.
- **Currency conversion**: All amounts are converted to USD using end-of-day token prices before the final calculation
- **Time aggregation**: Results are aggregated to daily granularity with consistent timestamp boundaries across all components  
- **Final calculation**: Daily earnings equals daily revenue minus daily expenses, with gap-filling applied to ensure continuous time series using zero values for missing days

*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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