Grove borrows via Sky's Allocator Module and deploys capital into curated yield strategies through an ALM (Asset-Liability Management) controller architecture. The protocol generates yield across its positions while management fees are settled off-chain via a Monthly Settlement Cycle between Grove and Sky DAO.

Grove operates as a programmable capital allocator that draws stablecoins from Sky Protocol and deploys them into diversified institutional-grade yield-bearing positions spanning tokenized treasuries, private credit, DeFi lending markets, and curated vaults across multiple chains.

Grove is a DeFi protocol built on Sky (formerly MakerDAO) infrastructure, incubated by Grove Labs and managed by Steakhouse Financial as risk curator.

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Grove

# grove Cost Of Revenue Methodology

## 1. Overview

Cost of revenue measures the funding costs recognized by Grove through its debt-based interactions with the Sky protocol. It specifically tracks the interest accruals and settlement corrections associated with the `ALLOCATOR-BLOOM-A` collateral position. This metric reflects the expenses incurred to maintain the liquidity required for Grove's allocator products.

## 2. Data sources

- **Blockchain events**: `drip` function calls from `Jug` contracts, `grab` function calls from `Vat` contracts, and ERC-20 `Transfer` events, covering Ethereum
- **External data**: End-of-day price feeds for USDS and relevant collateral assets

## 3. Step-by-step calculation

### Component A: Funding cost tracking

- **Purpose**: Calculate the gross interest expense associated with Grove's debt positions in the Sky protocol
- **Logic**: `drip` function calls from `Jug` contracts are parsed to extract the interest rate for the `ALLOCATOR-BLOOM-A` collateral type. `grab` function calls from `Vat` contracts are used to identify changes in the debt balance. The gross funding cost is calculated as the product of the debt change and the applicable rate.
- **Key fields**: `rate` (interest rate), `dart` (debt change)

### Component B: Settlement interest accrual adjustment

- **Purpose**: Adjust the gross funding cost based on actual settlement payments to or from the Grove subproxy
- **Logic**: ERC-20 `Transfer` events for USDS are filtered for transactions involving the Grove subproxy address. Inflows to the subproxy are treated as positive adjustments, while outflows are treated as negative adjustments. These transfers are aggregated to determine the net settlement payment per transaction. This payment amount is subtracted from the gross funding cost to arrive at the net interest accrual for the settlement period.
- **Key fields**: `value` (transfer amount), `from_address`, `to_address`

### Component C: USD conversion and aggregation

- **Purpose**: Normalize the calculated costs into a standard currency for reporting
- **Logic**: The net interest accruals are aggregated by day. Amounts are normalized by decimal precision and multiplied by end-of-day price feeds to determine the USD value. Daily values are zero-filled for periods without activity to ensure a continuous time series.
- **Key fields**: `amount` (net interest accrual), `token_address` (asset identification)

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

Expenses paid to third parties to deliver core service output.

GroveGROVE

Cost of revenue

Cost of revenue

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