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Etherex

# Etherex Earnings Methodology

## 1. Overview

Etherex earnings represents the net profit generated by the Etherex decentralized exchange protocol on Linea. The metric is calculated using the standard formula: earnings = revenue - expenses. Revenue consists of protocol fees collected from trading activity plus voting bribe payments, while expenses consist of token incentives paid to liquidity providers. This metric answers the business question of how profitable the Etherex protocol is after accounting for its primary operational cost (liquidity mining rewards).

## 2. Data sources

The calculation uses several types of raw blockchain data and external feeds:

- **Blockchain swap events**: Parsed `Swap` events from Etherex V2 pair contracts and Etherex V3 pool contracts on Linea, containing token amounts traded and user addresses
- **Transaction data**: Linea transaction records to identify the original user addresses for each swap
- **Trading pair creation events**: `PairCreated` and `PoolCreated` events from Etherex factory contracts defining token pairs and pool addresses
- **Fee configuration events**: Various events that set and update fee parameters including `SetPairFee`, `FeeAdjustment`, `SetPairFeeSplit`, and `SetPoolFeeProtocol` events
- **Liquidity provider reward events**: `NotifyReward` events from Gauge and GaugeV3 contracts tracking token emissions to liquidity providers
- **Voting bribe events**: `VotesIncentivized` events from FeeDistributor contracts capturing bribe payments for governance votes
- **Token metadata**: Token contract information including decimal places and symbols for accurate amount calculations
- **End-of-day price feeds**: Daily USD price data for all traded tokens and reward tokens

## 3. Step-by-step calculation

### Component A: Trading volume processing
- **Purpose**: Calculate USD trading volumes for all swaps across Etherex V2 and V3 protocols
- **Logic**: Extract swap events from both V2 pair contracts (using `amount0In`, `amount0Out`, `amount1In`, `amount1Out` fields) and V3 pool contracts (using `amount0`, `amount1` fields). Calculate net token amounts by taking the absolute difference for V2 swaps and direct absolute values for V3 swaps. Join with transaction data to get user addresses. Correct token amounts using decimal places from token metadata. Join with end-of-day price feeds for both tokens in each pair. Calculate USD volume using the minimum of the two token USD values to prevent price manipulation attacks. Aggregate volumes by day, chain, and pool address.
- **Key fields**: `token0_amount`, `token1_amount`, `account_address` (pool), `user_address`, `timestamp`

### Component B: Fee configuration tracking
- **Purpose**: Track time-varying fee parameters for each trading pool
- **Logic**: Process fee tier configuration events from factory contracts, including initial pool creation fees and subsequent fee adjustments. Handle V2 factory default fees that apply to new pairs created during specific time periods (defaulting to 3000 if before first factory fee change). Track fee split configurations that determine what portion of fees goes to the protocol versus liquidity providers. Create time intervals for each configuration change, with each configuration applying until the next change occurs. Store fee parameters with order IDs for temporal matching with swap events.
- **Key fields**: `fee_tier` (as decimal percentage), `fee_split` (protocol's portion), `order_id` (for temporal matching)

### Component C: Trading fee revenue calculation
- **Purpose**: Calculate protocol revenue from trading fees
- **Logic**: Join daily trading volumes with applicable fee configurations using order ID ranges to determine which fee settings were active during each swap. Calculate gross trading fees by multiplying volume by fee tier. Calculate protocol's share by multiplying gross fees by fee split percentage. Aggregate protocol fee revenue by day and product version.
- **Key fields**: `trading_volume`, `fee_tier`, `fee_split`, `revenue`

### Component D: Voting bribe revenue
- **Purpose**: Capture additional revenue from governance vote incentives
- **Logic**: Extract voting bribe payments from FeeDistributor `VotesIncentivized` events. Convert xREX token addresses to REX token addresses for consistency. Correct token amounts using decimal places and convert to USD using end-of-day price feeds. Aggregate bribe payments by day.
- **Key fields**: `token_address`, `amount`, `chain_id`

### Component E: Token incentive expenses
- **Purpose**: Calculate costs from REX token emissions to liquidity providers
- **Logic**: Extract reward notification events from Gauge contracts tracking REX token emissions (specifically token address 0xefd81eec32b9a8222d1842ec3d99c7532c31e348). Filter for only REX token rewards to exclude other potential reward tokens. Correct token amounts using REX decimal places and convert to USD using end-of-day price feeds. Aggregate incentive payments by day.
- **Key fields**: `token_address`, `token_incentives`, `chain_id`

### Final aggregation
- **Combining components**: Sum trading fee revenue and voting bribe revenue to get total revenue. Use token incentives as total expenses. Apply earnings formula: total revenue minus total expenses.
- **Currency conversion**: All components are converted to USD using end-of-day price feeds with decimal correction applied before conversion
- **Time aggregation**: All calculations use daily boundaries with timestamp truncation to day level. Missing days are filled with zero values.
- **Final calculation**: Daily earnings equals daily revenue (trading fees plus voting bribes) minus daily expenses (REX token incentives), expressed in USD

*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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