The option buyers pay premiums (revenue) to HEGIC stakers, who collateralize the option positions and cover the buyers' potential profits from their collateral.

Hegic is a non-custodial options exchange built on Arbitrum. Hegic was founded by Molly Wintermute and launched in 2020.



HEGIC tokenholders own and govern the protocol. They charge a premium (revenue) for each option that is bought on the platform.

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Hegic

# Hegic Earnings Methodology

## 1. Overview

Hegic earnings represents the net profit generated by the Hegic options trading protocol on Arbitrum. The metric calculates earnings as revenue minus expenses, where revenue consists entirely of trading fees collected when users create options positions, and expenses are currently zero as the protocol does not distribute token incentives. This measures the protocol's daily profitability from its core options trading business.

## 2. Data sources

The calculation uses several key data sources from Arbitrum:
- **Position creation events**: Parsed `Transfer` events from Hegic's `PositionsManager` contract indicating new option positions being minted
- **Token transfer data**: USDC transfer events on Arbitrum showing the actual fee amounts paid by users
- **Strategy events**: `Acquired` events from `HegicStrategyCall` contracts linking positions to specific option strategies
- **Strategy metadata**: Hardcoded dimension data mapping strategy contract addresses to strategy names, token symbols, and market sentiment
- **End-of-day price feeds**: Token price data for USD conversion of fee amounts

## 3. Step-by-step calculation

### Component A: Trading fee identification
- **Purpose**: Identify when users create new options positions and pay trading fees to the protocol
- **Logic**: Filter `Transfer` events from the `PositionsManager` contract where tokens are minted from the null address, indicating new position creation. Join these events with USDC token transfer logs on Arbitrum using transaction hash to capture the fee amounts paid by users. Link to `HegicStrategyCall_Acquired` events to identify which specific option strategy was purchased
- **Key fields**: `tokenId` from Transfer events, `value` from USDC transfers, transaction hash for joining, and strategy contract addresses for classification

### Component B: Strategy classification and metadata
- **Purpose**: Classify option positions by strategy type, underlying asset, and market sentiment
- **Logic**: Map strategy contract addresses from acquisition events to predefined strategy metadata including strategy names like `CALL_100`, `PUT_80`, `SPREAD_CALL_10_20`, token symbols like BTC and ETH, and market sentiment categories like BULL, BEAR, HIVO, and LOVO. Use left joins to handle cases where strategies may not be included in the dimension data
- **Key fields**: `strategy_address` for mapping, `strategy_name` for strategy identification, `token_symbol` for underlying asset, `sentiment` for market direction

### Component C: Daily fee aggregation
- **Purpose**: Aggregate all trading fees collected by the protocol on a daily basis
- **Logic**: Group all fee collection events by day using timestamp truncation, summing USDC fee amounts across all strategy types and user transactions. Apply decimal correction for USDC (6 decimal places) and convert to USD using end-of-day price feeds
- **Key fields**: `block_timestamp` truncated to day, `amount` in USDC, `token_address` for price lookup

### Component D: Revenue calculation
- **Purpose**: Determine total protocol revenue from trading activities
- **Logic**: Set all collected trading fees as revenue since Hegic retains 100% of fees paid by users. No revenue sharing or fee rebates are applied
- **Key fields**: Aggregated daily `fees` become `revenue`

### Component E: Expense calculation
- **Purpose**: Calculate protocol expenses, primarily token incentives paid to users
- **Logic**: Set token incentives to zero as Hegic currently does not distribute token rewards or incentives to users or liquidity providers. This results in zero expenses for all time periods
- **Key fields**: `token_incentives` set to 0, which becomes `expenses`

### Final aggregation
- **Combining components**: Calculate earnings using the standard formula: Earnings = Revenue - Expenses = Trading Fees - 0 = Trading Fees
- **Currency conversion**: Convert all amounts to USD using end-of-day price feeds and correct for USDC's 6-decimal precision
- **Time aggregation**: Aggregate all calculations to daily grain with timestamp truncation to day boundaries
- **Final calculation**: Since expenses are zero, earnings equals revenue, which equals the total daily trading fees collected by the protocol in USD

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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