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 Revenue Methodology

## 1. Overview

Frax protocol revenue represents the portion of staking rewards retained by the protocol from its liquid staking operations. The metric captures 10% of total fees generated by the frxETH liquid staking product, where fees are derived from staking rewards distributed to sfrxETH holders. This revenue model reflects a fee structure where 90% of staking rewards are passed to liquidity providers and 10% is retained as protocol revenue.

## 2. Data sources

- **Ethereum blockchain events**: Parsed `SfrxETH_NewRewardsCycle` events from the sfrxETH contract on Ethereum that record reward distributions to stakers
- **External price data**: End-of-day token price feeds for USD conversion of reward amounts
- **Token metadata**: Token decimal and contract information for proper amount normalization

## 3. Step-by-step calculation

### Component A: Supply-side reward extraction
- **Purpose**: Extract and standardize staking reward distributions from the frxETH liquid staking protocol
- **Logic**: The calculation begins by identifying `SfrxETH_NewRewardsCycle` events from the sfrxETH contract on Ethereum. These events contain the `rewardAmount` field representing rewards distributed to stakers. Each event is filtered to exclude removed transactions and is aggregated by day. All token addresses are standardized to the WETH address for consistent price conversion. The business classification assigns these as liquid staking supply-side fees for the frxETH product.
- **Key fields**: `rewardAmount` (the distributed reward amount), `block_timestamp` (for daily aggregation), `token_address` (standardized to WETH), `account_address` (sfrxETH contract)

### Component B: Fee structure calculation  
- **Purpose**: Calculate total protocol fees based on the supply-side portion
- **Logic**: The supply-side rewards represent 90% of total protocol fees in Frax's fee model. To derive total fees, the supply-side fees are divided by 0.9. This mathematical relationship reflects that stakers receive 90% of generated fees while 10% is retained by the protocol. The calculation assumes that all staking rewards distributed to users represent the majority portion of the fee structure.
- **Key fields**: `fees_supply_side` (USD-converted supply-side fees), `fees` (calculated total fees)

### Component C: Currency conversion and aggregation
- **Purpose**: Convert reward amounts to USD and aggregate by time periods
- **Logic**: Raw reward amounts undergo decimal correction using token metadata to ensure proper numerical representation. The corrected amounts are then converted to USD using end-of-day price feeds matched by date and token address. Daily aggregation groups all rewards within each 24-hour period, and the finalization macro applies any necessary gap-filling for missing dates.
- **Key fields**: `fees_supply_side` (USD-converted amount), `timestamp` (daily boundaries), `chain_id` (Ethereum)

### Final aggregation
- **Combining components**: The revenue calculation multiplies total fees by 0.1 (10%) to derive protocol revenue, implementing the fee retention model where the protocol keeps 10% of all generated fees
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds, ensuring consistent valuation across time periods
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with the finalization macro handling any missing dates through zero-filling
- **Final calculation**: Protocol revenue equals supply-side fees divided by 0.9 and then multiplied by 0.1, which simplifies to supply-side fees multiplied by approximately 0.111 (10/90)

*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.

Frax Ether

Revenue

Revenue

Competitive landscape

Chain breakdown