# Fathom DEX Fees Methodology

## 1. Overview

Fees measures the total value paid by users to execute trades on Fathom DEX. These fees are paid to compensate liquidity providers for facilitating asset swaps within the protocol's automated market maker (AMM) pools. Fees are calculated as a percentage of the total trading volume based on the specific fee tier assigned to each liquidity pool.

## 2. Data sources

- **Blockchain events**: `PairCreated` events from `Factory` contracts and `Swap` events from `Pair` contracts, covering XDC
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Trading activity identification

- **Purpose**: Identify and extract all swap transactions occurring within Fathom DEX liquidity pools.
- **Logic**: `Swap` events are parsed from `Pair` contracts. For every transaction, the net change for each asset in the pair is determined by calculating the difference between the incoming and outgoing amounts. This ensures that only the actual volume traded within the pool is captured.
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out`, and `account_address`.

### Component B: Trading pair and fee tier mapping

- **Purpose**: Map each liquidity pool to its corresponding assets and applicable fee percentage.
- **Logic**: `PairCreated` events are parsed from `Factory` contracts to identify the deployment of new trading pairs. Each pair is associated with a specific fee tier (e.g., 0.3%), which represents the proportion of the trade value collected as fees. These tiers are stored and joined with trade data to enable accurate fee calculations for each pool.
- **Key fields**: `token0`, `token1`, `pair_address`, and `fee_tier`.

### Component C: USD conversion and fee aggregation

- **Purpose**: Normalize all fee values to USD for standardized reporting.
- **Logic**: Asset amounts are normalized by decimal precision using asset metadata. Trading volumes are converted to USD by multiplying the normalized asset quantities by end-of-day price feeds. Fees are then calculated by applying the pool-specific fee tier to the total USD trading volume. All values are aggregated by day using UTC boundaries.
- **Key fields**: `block_timestamp`, `fee_tier`, and `price_usd`.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

Exchanges (DEX)