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Lending

Dolomite

# Dolomite Supply-side fees Methodology

## 1. Overview

Dolomite supply-side fees represent the portion of protocol fees that accrue to liquidity providers and lenders on the Dolomite protocol. This metric aggregates three distinct fee streams: interest fees from lending activities, trading fees from the protocol's internal AMM, and fees from liquidation events. The calculation determines how much of each fee type flows to the supply side based on configurable parameters and protocol-specific logic across Arbitrum, Base, Ink, Berachain, and Ethereum networks.

## 2. Data sources

- **Dolomite protocol event logs**: Parsed blockchain events from the Dolomite protocol across Arbitrum, Base, Ink, Berachain, and Ethereum networks
- **Index update events**: `LogIndexUpdate` events that track changes to borrow and supply indices for interest calculation
- **Trading events**: `LogTrade` events capturing internal AMM trading activity within the protocol
- **Liquidation events**: `LogLiquidate` events recording liquidation transactions and amounts
- **Fee configuration events**: `LogSetEarningsRate` and `LogSetEarningsRateOverride` events that set supply-side fee share parameters
- **Liquidation parameter events**: `LogSetSpreadPremium` and `LogSetLiquidationSpreadPremium` events configuring liquidation spreads
- **Market registration events**: `LogAddMarket` events defining supported tokens and markets
- **Account balance events**: Various balance update events from deposits, withdrawals, trades, and transfers
- **End-of-day price feeds**: Token price data for USD conversion
- **Token metadata**: Token symbols, decimals, and addresses for proper amount calculation
- **Dolomite market prices**: Protocol-internal price feeds used as fallback pricing

## 3. Step-by-step calculation

### Component A: Interest fees from lending
- **Purpose**: Calculate supply-side fees earned from interest paid by borrowers
- **Logic**: Track borrow index changes from `LogIndexUpdate` events, which represent accumulated interest over time. Identify active loans by finding account balance updates where `par_sign` is false and `par_amount` is greater than zero, indicating borrowed positions. For each index update, calculate the interest fee as the change in borrow index multiplied by the outstanding loan amount. Apply the appropriate supply-side fee share, which can be either a global rate set by `LogSetEarningsRate` events or a market-specific override from `LogSetEarningsRateOverride` events. The fee share determines what portion of interest payments flow to liquidity providers versus the protocol treasury.
- **Key fields**: `borrow_index` and `previous_borrow_index` for calculating interest accrual, `par_amount` for loan sizes, `supply_side_fee_share` for fee distribution, `interest_fees_amount_usd` for final USD values

### Component B: Internal trading fees  
- **Purpose**: Calculate supply-side fees from trades executed through Dolomite's internal AMM
- **Logic**: Extract trading data from `LogTrade` events, which capture swaps between different markets within the protocol. Calculate trading volume using the input token amount from `takerInputUpdate.deltaWei.value` field, normalize by token decimals to get actual token amounts. Apply a constant fee rate of 0.3% to all internal trades, as this rate is hardcoded for the protocol's AMM functionality. Convert token amounts to USD using either external price feeds or Dolomite's internal market prices as fallback. Since internal trades use the protocol's own liquidity, all trading fees flow to the supply side.
- **Key fields**: `input_amount` for trade sizes, `trading_pair_name` for market identification, `amount_usd` for USD-denominated volumes

### Component C: Liquidation fees
- **Purpose**: Calculate supply-side fees earned from liquidation events
- **Logic**: Process `LogLiquidate` events to identify liquidation transactions and extract the liquidated amount from `liquidOwedUpdate.deltaWei.value`. Calculate the liquidation spread premium by combining a default base spread of 5% with market-specific premiums for both the held token and owed token from `LogSetSpreadPremium` and `LogSetLiquidationSpreadPremium` events. The total liquidation spread is computed as base_spread × held_premium × owed_premium. Apply this spread to the liquidation volume to determine the fee amount. Liquidation fees represent the discount that liquidators receive, which effectively comes from the liquidated positions and flows to protocol participants.
- **Key fields**: `liquidation_amount` for liquidation sizes, `liquidation_spread_premium` for fee rates, `liquidation_volume_usd` for USD values

### Final aggregation
- **Combining components**: Union all three fee components using `UNION ALL`, ensuring each component contributes its fees with consistent field structure including timestamp, account address, chain, token information, and USD amounts
- **Currency conversion**: Convert token amounts to USD using end-of-day price feeds as primary source, with Dolomite's internal market prices serving as fallback when external prices are unavailable
- **Time aggregation**: Group fees by daily boundaries using `timestamp_trunc` to day level, ensuring consistent time-based aggregation across all components
- **Final calculation**: Apply the `finalize_metric_fees_supply_side` macro to sum fees by day, account, and token, apply any necessary filters including chain availability restrictions, and format the output according to standard metric conventions with zero-filling strategy for missing data

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

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

DolomiteDOLO

Supply-side fees

Supply-side fees

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