# dYdX Chain Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the share of fees that is distributed to service providers on dYdX Chain. For this product, the metric captures the total value of transaction fees and tips paid by users to validators and stakers for securing the network and processing transactions. On dYdX Chain, 100% of these transaction-related fees are allocated to the supply side because the protocol's community tax is currently set to zero.

## 2. Data sources

- **Blockchain events**: Transaction records including fees and tips from dYdX Chain
- **External data**: End-of-day price feeds for the native dYdX asset

## 3. Step-by-step calculation

### Component A: Transaction fee extraction

- **Purpose**: Identify and aggregate all gas-related fees paid on the network
- **Logic**: Transaction records are parsed to extract the transaction fee and the transaction tip. These two values are summed to determine the total cost per transaction. Transactions with null fee values are excluded to ensure only successful or valid fee-paying actions are included.
- **Key fields**: `transaction_fee`, `transaction_tip`

### Component B: Normalization and USD conversion

- **Purpose**: Standardize fee values into a common currency for reporting
- **Logic**: Aggregated fee amounts are normalized by 18-decimal precision. These normalized values are then multiplied by end-of-day price feeds for the native asset. Data is aggregated using UTC day boundaries.

### Component C: Supply-side allocation

- **Purpose**: Determine the final portion of fees distributed to validators and stakers
- **Logic**: A 100% allocation rate is applied to the total transaction fees. This reflects the current protocol configuration where all gas fees and tips are distributed to network participants (validators and stakers) without any portion being retained as protocol revenue or redirected to a community treasury.

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

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

Supply-side fees

Blockchains (L1)

Market makers offer trades through order book & make money on bid-ask spreads (supply-side fees).

dYdX is a non-custodial trading and derivatives protocol initially built on Ethereum and later expanded to their own blcokchain built on top of the Cosmos SDK. dYdX was founded by Antonio Juliano and launched in 2017.

DYDX tokenholders own and govern the protocol. dYdX Trading Inc. currently takes all of the total trading fees paid by traders (revenue). dYdX’s investors include a16z, Polychain, The Spartan Group, etc.

dYdX Chain

Supply-side fees

Supply-side fees

Chain breakdown