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Fathom

# Fathom Fees Methodology

## 1. Overview

Fathom fees represent the total revenue generated by the Fathom protocol ecosystem, combining fees from two main products: Fathom DEX (decentralized exchange) and Fathom Lending (lending protocol). This metric captures trading fees from DEX swaps and interest-based fees plus flash loan premiums from lending activities. The calculation aggregates all fee sources on a daily basis in USD terms.

## 2. Data sources

The calculation relies on several categories of raw blockchain data and external sources:

- **Blockchain events**: Parsed XDC blockchain event logs including `Pair_Swap_event` from Fathom DEX v2 trading pairs, `LendingPool_MintedToTreasury_event` and `LendingPool_FlashLoan_event` from Fathom Lending v3 protocol
- **Transaction data**: XDC transaction records to identify user addresses associated with trading activity
- **Protocol configuration events**: `Factory_PairCreated_event` logs for trading pair creation and fee tier configuration, `LendingPoolConfigurator_ReserveFactorChanged_event` for reserve factor updates, and `ReserveInitialized_event` for lending market initialization
- **External data**: End-of-day token price feeds for USD conversion, token metadata including decimals and symbols, and treasury accruals data from external states tracking
- **Reference data**: Trading pair configurations with fee tiers, lending market configurations, and reserve factor settings over time

## 3. Step-by-step calculation

### Component A: Fathom DEX trading fees
- **Purpose**: Calculate fees generated from decentralized exchange trading activity
- **Logic**: Extract all `Pair_Swap_event` logs from Fathom DEX v2 on XDC blockchain. For each swap, calculate trading volume by taking the absolute difference between `amount0In` minus `amount0Out` for token0, and `amount1In` minus `amount1Out` for token1. Correct for token decimals using metadata, then convert to USD using end-of-day price feeds, preferring token0 pricing but falling back to token1 if unavailable. Apply the protocol fee tier of 0.3% (stored as 0.003 decimal) to the USD trading volume to determine fees collected
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out` from swap events, `fee_tier` from trading pair configuration, token decimals and USD prices

### Component B: Fathom Lending interest-based fees  
- **Purpose**: Calculate protocol revenue from lending interest payments
- **Logic**: Combine treasury accruals from external data source with treasury mints from `LendingPool_MintedToTreasury_event` to get total cumulative interest. Calculate daily revenue as the difference between consecutive days' cumulative amounts. Apply reserve factor formula where total fees equal daily revenue divided by reserve factor, multiplied by (1 minus reserve factor), representing the protocol's share vs supply-side share. Reserve factors come from `LendingPoolConfigurator_ReserveFactorChanged_event` and are stored as basis points, converted to decimals by dividing by 10,000
- **Key fields**: `treasury_accruals` from external source, `amountMinted` from treasury events, `newReserveFactor` from configuration events

### Component C: Fathom Lending flash loan fees
- **Purpose**: Calculate fees from flash loan premiums
- **Logic**: Extract `LendingPool_FlashLoan_event` logs and sum the `premium` field, which represents the fee paid for flash loan usage. These fees are direct revenue to the protocol without revenue sharing
- **Key fields**: `premium` from flash loan events

### Final aggregation
- **Combining components**: Union Fathom DEX trading fees with combined Fathom Lending fees (interest + flash loans), ensuring all amounts are in USD terms with proper decimal correction applied
- **Currency conversion**: USD conversion uses end-of-day price feeds matched by timestamp, chain, and token address. Token amounts are first corrected for decimals using token metadata
- **Time aggregation**: All fees are aggregated to daily boundaries using timestamp truncation to day level. Missing data points are filled with zeros using the fill_zeros strategy
- **Final calculation**: Sum all fee components grouped by timestamp, chain, and product ID to produce the final daily fee amounts for the Fathom protocol ecosystem

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

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