Stakers deposit funds into Frax and receive a return on investment in the form of staking rewards (supply-side fees).


Frax Ether is a liquid staking derivative product created by the Frax Finance protocol. Frax Finance was founded by Sam Kazemian, Stephen Moore, Jason Huoan & Travis Moore and launched in 2019.


FRAX tokenholders own and govern the Frax Finance protocol, including the Frax Ether business line. They currently take a cut of the total staking rewards earned by the protocol (revenue). Frax’s investors include Crypto.com Capital & Ascensive Assets.


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Frax Ether

# Frax Ether Average fees per user (AFPU) Methodology

## 1. Overview

Average fees per user (AFPU) measures the average daily fee revenue generated per active user on the Frax liquid staking protocol. This metric is calculated by dividing total daily fees by the number of daily active users, providing insight into the per-user monetization effectiveness of the protocol.

## 2. Data sources

The calculation relies on several key data sources:
- **Blockchain events**: Parsed Ethereum event logs from Frax protocol contracts, specifically `FrxETHMinter_ETHSubmitted_event` for user activity tracking and `SfrxETH_NewRewardsCycle_event` for reward distributions
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal precision handling
- **Transaction data**: Ethereum transaction logs containing contract interaction details including block timestamps, transaction hashes, and log indices

## 3. Step-by-step calculation

### Component A: Daily active user identification
- **Purpose**: Identifies and counts unique users who interact with the Frax liquid staking protocol daily
- **Logic**: Extracts user addresses from `FrxETHMinter_ETHSubmitted_event` logs on Ethereum, which capture when users deposit ETH for liquid staking. Users are categorized as 'Depositor' type and associated with the liquid staking business segment. Daily distinct users are counted using HyperLogLog aggregation across multiple dimensions including project-level, chain-level, user-type-level, and product-level breakdowns.
- **Key fields**: `sender` (user address), `block_timestamp` (for daily grouping), `user_type` ('Depositor'), `market_sector_id` ('liquid_staking')

### Component B: Supply-side fee calculation
- **Purpose**: Calculates the fees distributed to liquidity providers (supply-side participants) from staking rewards
- **Logic**: Processes `SfrxETH_NewRewardsCycle_event` logs from Ethereum, which contain reward distribution amounts for the sfrxETH liquid staking token. Reward amounts are extracted from the `rewardAmount` field, converted to USD using end-of-day price feeds, and corrected for token decimals. The rewards represent yields paid to stakers.
- **Key fields**: `rewardAmount` (reward distribution amount), `block_timestamp` (for daily aggregation), `token_address` (sfrxETH token address)

### Component C: Total fee estimation
- **Purpose**: Estimates total protocol fees by extrapolating from supply-side rewards
- **Logic**: Takes the supply-side fees and divides by 0.9 (90%) to estimate total fees, assuming that 90% of fees are distributed to users as rewards while 10% is retained by the protocol as revenue.
- **Key fields**: `fees_supply_side` (converted to total `fees`)

### Final aggregation
- **Combining components**: Daily active user counts are matched with daily total fees by timestamp to create user-fee pairs for each day
- **Currency conversion**: All reward amounts are converted to USD using end-of-day token price feeds, with proper decimal adjustment based on token metadata
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, ensuring consistent daily metrics
- **Final calculation**: AFPU is calculated by dividing total daily fees (in USD) by the count of daily active users, using the calculate_arpu macro. Missing data points are filled with zeros using the fill_zeros strategy to maintain continuous time series data.

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

Frax Ether

Average fees per user (AFPU)

Average fees per user (AFPU)

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