# Concentrated Liquidity Revenue Methodology

## 1. Overview

Revenue measures the portion of trading fees that Etherex retains from its Concentrated Liquidity product, as determined by the protocol's take rate. These fees are collected during swap operations and represent the protocol's earnings before the distribution of incentives or operating expenses. The remaining portion of collected fees is distributed to the supply-side participants (liquidity providers) as compensation for providing capital to the Concentrated Liquidity pools.

## 2. Data sources

- **Blockchain events**: `Swap` events from `Pool` contracts, and `PoolCreated`, `SetPoolFeeProtocol`, and `FeeAdjustment` events from `Factory` and `PoolFactory` contracts, covering Linea
- **External data**: Asset metadata and end-of-day price feeds

## 3. Step-by-step calculation

### Component A: Swap volume extraction

- **Purpose**: To identify and quantify all trading activity within Concentrated Liquidity pools.
- **Logic**: `Swap` events are parsed from `Pool` contracts to determine the change in asset balances for each transaction. The absolute values of asset inflows and outflows are extracted for both assets in a pair. To mitigate the impact of potential price manipulation or data anomalies, the lower USD-denominated value of the two assets involved in the swap is used to define the trade volume.

### Component B: Protocol fee parameterization

- **Purpose**: To determine the specific fee tier and protocol take rate (fee split) applicable to each pool.
- **Logic**: Total swap fee tiers are identified using `PoolCreated` and `FeeAdjustment` events from `Factory` and `PoolFactory` contracts. Simultaneously, the protocol's portion of those fees is determined by parsing `SetPoolFeeProtocol` and `PoolCreated` events. Both the fee tier and the protocol split values are normalized by decimal precision (divisor of 1,000,000) to derive the effective percentage rates. These configurations are tracked chronologically to ensure the correct rates are applied to swaps based on their block timestamp.

### Component C: Revenue calculation and USD conversion

- **Purpose**: To calculate the final revenue amount and normalize the data for reporting.
- **Logic**: Revenue is calculated by multiplying the trade volume by the applicable fee tier and the protocol fee split: `revenue = trading_volume * fee_tier * fee_split`. Asset amounts are normalized by their respective decimal precision. The resulting values are converted to USD using end-of-day price feeds and aggregated to a daily granularity using UTC day boundaries. Any days with missing data are zero-filled to ensure a continuous time series.

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

Concentrated Liquidity

Archived

Revenue

Revenue