# Fathom Lending Fees Methodology

## 1. Overview

Fees measures the total value paid by borrowers and flash loan users to utilize Fathom Lending. This metric captures the economic value generated by the lending protocol, consisting primarily of interest payments accrued on outstanding loans and premiums paid for flash loan execution. All fee components are normalized to USD using end-of-day price feeds to facilitate cross-asset comparison.

## 2. Data sources

- **Blockchain events**: `FlashLoan` and `MintedToTreasury` events from `LendingPool` contracts, and `ReserveInitialized` and `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts, covering XDC
- **External data**: End-of-day price feeds for supported lending assets

## 3. Step-by-step calculation

### Component A: Market and configuration tracking

- **Purpose**: Identify active lending markets and their respective fee parameters
- **Logic**: Active lending markets are identified through `ReserveInitialized` events from `LendingPoolConfigurator` contracts, which map underlying assets to their respective debt and interest-bearing tokens. The protocol's reserve factor—representing the portion of interest allocated to the protocol treasury—is tracked via `ReserveFactorChanged` events from the same contracts. These factors are stored as basis points and filled forward to ensure a continuous daily record of the fee split for every supported asset.
- **Key fields**: `in_asset` (underlying asset), `in_newReserveFactor` (basis points)

### Component B: Interest-based fee calculation

- **Purpose**: Calculate total interest paid by borrowers, including shares distributed to both the protocol and liquidity providers
- **Logic**: Protocol revenue is first determined by aggregating realized `MintedToTreasury` events from `LendingPool` contracts and combining them with unrealized treasury accruals captured from protocol state snapshots. Total borrower fees are then back-calculated by dividing this protocol revenue by the applicable reserve factor. The supply-side portion of the fees is calculated as the difference between total interest and protocol revenue, ensuring the full economic cost paid by borrowers is captured.
- **Key fields**: `in_amountMinted` (treasury share), `reserve_factor` (fee split)

### Component C: Flash loan premium extraction

- **Purpose**: Capture fees generated from flash loan activity
- **Logic**: Premiums paid by users for atomic flash loans are parsed from `FlashLoan` events emitted by `LendingPool` contracts. These premiums represent a fixed percentage of the borrowed amount and are paid directly by the loan initiator.
- **Key fields**: `in_premium` (fee amount), `in_asset` (asset address)

### Component D: Normalization and USD conversion

- **Purpose**: Aggregate all fee components and convert them into a uniform USD value
- **Logic**: Interest-based fees and flash loan premiums are summed on a daily basis for each asset. Amounts are normalized by decimal precision based on asset metadata and multiplied by end-of-day price feeds. Values are aggregated to provide a project-level metric with daily granularity using UTC day boundaries.
- **Key fields**: `block_timestamp` (timing), `amount` (quantities), `price_usd` (valuation)

*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

Lending