Liquidity providers deposit funds into DFX and receive a share of trading fees (supply-side fees).

DFX is a decentralized foreign exchange protocol deployed on Polygon, Ethereum & Arbitrum. DFX was founded in 2021 by Kevin Zhang and Adrian Li.

DFX tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue).

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Exchanges (DEX)

DFX Finance

# DFX Finance Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of trading fees that goes to liquidity providers in DFX protocol pools, after deducting protocol fees. This metric answers how much revenue liquidity providers earn from their capital deployed in DFX AMM pools. The calculation multiplies daily trading volumes by pool-specific fee tiers, then applies a protocol fee adjustment that began on February 13, 2023, where 50% of fees are retained as protocol revenue and 50% go to liquidity providers.

## 2. Data sources

- **Trade events**: Parsed `Trade` events from DFX v1 and v2 contracts deployed on Ethereum, Polygon, and Arbitrum networks
- **Transaction data**: Ethereum, Polygon, and Arbitrum transaction records to identify user addresses
- **Contract creation events**: Parsed `NewCurve` events and `newCurve` function calls from `CurveFactoryV22` contracts to determine dynamic fee tiers
- **Token metadata**: Token decimals and symbol information for amount normalization and pair naming
- **Price feeds**: End-of-day token price feeds for USD conversion
- **Manual configuration**: Hardcoded fee tier overrides for specific Arbitrum pool contracts

## 3. Step-by-step calculation

### Component A: Trade event extraction
- **Purpose**: Extract and standardize trade events across DFX protocol versions and chains
- **Logic**: Collect `Trade` events from DFX v1 `Curve` contracts and DFX v2 `CurveV2` and `CurveV22` contracts on Ethereum, Polygon, and Arbitrum. Each trade event contains `origin` and `target` token addresses, `originAmount` and `targetAmount` values, and contract address. Events are joined with transaction records to identify the `user_address` from the transaction `from_address` field. All trades are classified under the 'exchanges' market sector and 'dex' business segment.
- **Key fields**: `block_timestamp`, `transaction_hash`, `log_index`, `address` (pool contract), `origin` (token0), `target` (token1), `originAmount`, `targetAmount`

### Component B: Fee tier determination
- **Purpose**: Assign appropriate fee rates to each trading pool
- **Logic**: Fee tiers are determined through two methods. For Ethereum and Polygon v2 pools, fee tiers are extracted from `CurveFactoryV22` contract creation events where the `_epsilon` parameter in the `newCurve` function call is divided by 10^18 to get the decimal fee rate. For specific Arbitrum pools, manual overrides are applied with predefined fee tiers (0.1%, 0.3%). For historical trades before February 13, 2023, a default initial fee tier of 0.05% is applied regardless of the pool's actual configuration.
- **Key fields**: `account_address` (pool contract), `fee_tier` (decimal rate like 0.001 for 0.1%), `chain`, `version`

### Component C: Daily trading volume aggregation
- **Purpose**: Calculate USD-denominated trading volumes for each pool by day
- **Logic**: Trade events are grouped by day using timestamp truncation. Token amounts are normalized by dividing by 10^decimals for each token. The normalized amounts are joined with end-of-day price feeds to convert to USD values. When both tokens in a pair have available prices, the minimum of the two USD values is used to avoid double-counting. If only one token has a price, that single USD value is used. If neither token has a price, the volume is recorded as zero. Pool names are generated by concatenating token symbols with a hyphen separator.
- **Key fields**: `timestamp` (daily), `trading_volume` (USD), `token0_amount`, `token1_amount`, `fee_tier`

### Component D: Total fees calculation
- **Purpose**: Calculate total fees generated by each pool
- **Logic**: Daily trading volumes are multiplied by the corresponding fee tier for each pool. The calculation groups data by timestamp, chain, market sector, business segment, product, and fee tier, then sums trading volumes before applying the fee tier multiplication. This produces the gross fees collected by each pool before any protocol fee adjustments.
- **Key fields**: `fees` (trading volume × fee tier), `trading_volume`, `fee_tier`

### Final aggregation: Supply-side fees calculation
- **Combining components**: Total fees from Component D are processed through a protocol fee adjustment logic
- **Protocol fee logic**: For dates before February 13, 2023, the full fee amount goes to liquidity providers. For dates on or after February 13, 2023, fees are multiplied by (1 - 0.5) = 0.5, meaning 50% goes to the protocol and 50% remains as supply-side fees for liquidity providers
- **Time aggregation**: Data is aggregated at daily granularity with timestamp truncation to day boundaries
- **Currency conversion**: All fees are denominated in USD through the price conversion applied in the trading volume calculation
- **Final calculation**: Supply-side fees = trading volume × fee tier × protocol fee adjustment factor, where the adjustment factor is 1.0 before February 13, 2023, and 0.5 thereafter

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

Portion of fees distributed to service providers or supply-side participants.

DFX FinanceDFX

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown