# Fathom Lending Revenue Methodology

## 1. Overview

Revenue measures the portion of interest and flash loan fees that Fathom Lending retains. These earnings are derived from the protocol's take rate applied to borrow interest and a specific share of premiums collected from flash loan transactions. This metric represents the income generated by the protocol before the distribution of incentives or operating expenses.

## 2. Data sources

- **Blockchain events**: `MintedToTreasury` and `FlashLoan` events from `LendingPool` contracts, and `ReserveInitialized` and `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts on XDC
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Interest revenue tracking

- **Purpose**: Captures the protocol's share of interest paid by borrowers.
- **Logic**: Protocol revenue is identified through `MintedToTreasury` events from `LendingPool` contracts and state-based treasury accrual snapshots. Daily revenue is calculated by determining the change in cumulative treasury accruals and adding the value of assets minted directly to the treasury. Reserve factors, which define the protocol's share of interest, are tracked using `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts to ensure accurate allocation between lenders and the protocol.
- **Key fields**: `amount`, `treasury_accruals`, `token_address`

### Component B: Flash loan revenue extraction

- **Purpose**: Calculates the protocol's portion of fees generated from flash loan activity.
- **Logic**: `FlashLoan` events are parsed from `LendingPool` contracts to identify the premium paid by the borrower. A protocol-defined fee split of 0.04% (0.0004) is applied to the premium amount to determine the retained revenue. The remaining portion of the premium is allocated to supply-side participants.
- **Key fields**: `premium`, `token_address`

### Component C: USD conversion and aggregation

- **Purpose**: Normalizes revenue values into a common currency for reporting.
- **Logic**: All collected revenue amounts are normalized by decimal precision based on asset metadata. Normalized values are multiplied by end-of-day price feeds for each respective asset. Daily totals are aggregated across all lending markets and converted to USD using UTC day boundaries.
- **Key fields**: `block_timestamp`, `token_address`, `price_usd`

*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.