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 Fees Methodology

## 1. Overview

The total value generated by Grove's managed assets through yield-bearing positions and incentive rewards is measured by the Fees metric. Gross income earned by the protocol's managed liquidity across various decentralized finance strategies is captured. This includes both the organic yield accrued from underlying protocols and external incentives claimed through reward distributors.

## 2. Data sources

- **Blockchain events**: `Claimed` events from `Distributor` contracts on Ethereum, covering Ethereum, Base, Avalanche, and Monad
- **Blockchain data**: Daily token net flows and `token` state calls from `PullTokenWrapper` contracts, covering Ethereum, Base, Avalanche, and Monad
- **External data**: End-of-day price feeds for underlying assets

## 3. Step-by-step calculation

### Component A: Yield accrual tracking

- **Purpose**: Capture yield accrued on held assets within Grove's managed positions
- **Logic**: Daily token balances are reconstructed for specific protocol-controlled addresses by aggregating net token flows. These balances are joined with daily yield index data for each asset. Fees are calculated by applying the daily change in the normalized yield index to the daily token balance.
- **Key fields**: `net_flow` (daily token movements), `token_balance` (running account balances), `yield_index_normalized` (asset-specific yield tracking)

### Component B: Incentive reward extraction

- **Purpose**: Capture incentive rewards claimed via Merkl for Grove's liquidity positions
- **Logic**: `Claimed` events are parsed from `Distributor` contracts on Ethereum to identify incentive rewards. Claimed amounts are filtered for specific protocol-controlled addresses. Wrapper tokens are mapped to their underlying yield-bearing assets using state data from `PullTokenWrapper` contracts to ensure consistent asset categorization.
- **Key fields**: `in_amount` (claimed reward quantities), `in_token` (reward asset identification), `in_user` (recipient address filtering)

### Component C: USD conversion and aggregation

- **Purpose**: Normalize values to USD and aggregate across chains and products
- **Logic**: All fee components are normalized by decimal precision. Values are converted to USD using end-of-day price feeds. For yield-bearing assets, the price is determined by multiplying the underlying asset's price by the current normalized yield index. Daily totals are aggregated across all supported chains and products.
- **Key fields**: `fees` (native unit quantities), `price_usd` (asset valuation)

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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Fees

Fees

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