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 Expenses Methodology

## 1. Overview

Expenses measures the total operational costs for the Grove Allocator, primarily consisting of funding costs recognized through the Sky debt infrastructure. These expenses represent the interest accrued on debt positions used to facilitate yield strategies, adjusted for settlement payments. Unrealized mark-to-market movements, such as negative carry on yield positions, are excluded from this metric.

## 2. Data sources

- **Blockchain events**: `drip` and `grab` function calls from `Jug` and `Vat` contracts, and USDS token transfers on Ethereum
- **External data**: End-of-day price feeds for USDS

## 3. Step-by-step calculation

### Component A: Sky debt interest tracking

- **Purpose**: Capture the gross interest accrued on debt positions used by the Grove Allocator
- **Logic**: Interest rates are extracted from `drip` function calls from `Jug` contracts for the `ALLOCATOR-BLOOM-A` collateral type. Debt changes are parsed from `grab` function calls from `Vat` contracts. The debt increase amount is calculated by multiplying the debt change by the current interest rate identified at the time of the transaction.

### Component B: Settlement adjustment

- **Purpose**: Refine funding costs based on net settlement payments
- **Logic**: Funding costs are adjusted by identifying USDS transfers associated with the Grove subproxy address. Signed USDS transfers occurring within the same settlement transactions as the debt changes are subtracted from the debt increase amount to determine the net interest accrual recognized during settlement.

### Component C: Token incentives

- **Purpose**: Account for protocol-distributed asset incentives
- **Logic**: Token incentives are set to a constant value of zero. This reflects that external asset incentives are not currently incorporated into the operational expense metric for the Grove Allocator.

### Component D: USD conversion and aggregation

- **Purpose**: Normalize values to USD and aggregate to daily granularity
- **Logic**: All recognized costs are normalized by decimal precision. Amounts are converted to USD using end-of-day price feeds and aggregated by day and chain using UTC day boundaries.

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

Total project operating and incentive expenses.

GroveGROVE

Expenses

Expenses

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