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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of trading fees that goes to liquidity providers or market makers in a decentralized protocol. For Hegic, this metric is explicitly set to 0 because Hegic operates as a peer-to-pool options protocol where all trading fees are captured by the protocol itself rather than distributed to individual liquidity providers. This metric answers the question "How much revenue do supply-side participants earn from trading activity?" and for Hegic, the answer is none - all fees flow to the protocol treasury.

## 2. Data sources

The calculation relies on several types of blockchain and external data:

- **Option trading events**: Parsed Arbitrum event logs from Hegic's `PositionsManager` contract capturing `Transfer` events when new option positions are minted
- **Strategy acquisition events**: Parsed Arbitrum event logs from `HegicStrategyCall` contracts capturing `Acquired` events that link option positions to specific trading strategies  
- **Token transfer data**: Arbitrum USDC token transfer records that capture the fee payments made during option purchases
- **Strategy metadata**: Predefined mapping of 240+ Hegic strategy contract addresses to strategy classifications including option types, underlying assets, and market sentiment
- **Price data**: End-of-day token price feeds for USD conversion of USDC fee amounts
- **Token metadata**: Token decimal precision information for proper amount normalization

## 3. Step-by-step calculation

### Component A: Option trading fee extraction
- **Purpose**: Identify and extract trading fees paid when users purchase options on Hegic
- **Logic**: Query Arbitrum blockchain for `Transfer` events from Hegic's `PositionsManager` contract where new option positions are minted (identified by transfers from the null address `0x0000000000000000000000000000000000000000`). Join these minting events with USDC token transfers occurring in the same transaction to capture the fee amounts. The fee is the USDC amount transferred as payment for the option purchase.
- **Key fields**: `block_timestamp` for timing, `transaction_hash` for linking events, `tokenId` for position identification, and `value` for fee amounts in USDC

### Component B: Strategy classification  
- **Purpose**: Categorize each option position by its trading strategy type and underlying asset
- **Logic**: Link option positions to their corresponding strategy contracts using `HegicStrategyCall` `Acquired` events that contain the position ID and strategy contract address. Map each strategy contract address to predefined metadata including strategy name (e.g., `CALL_100`, `PUT_90`, `STRADDLE`), underlying token (`BTC` or `ETH`), market sentiment (`BULL`, `BEAR`, `HIVO`, `LOVO`), and position multiplier. This classification enables proper categorization of trading activity across different option strategies.
- **Key fields**: Strategy contract `address`, `strategy_name`, `token_symbol`, `sentiment`, and `multiplier` for position sizing

### Component C: Fee standardization and conversion
- **Purpose**: Convert raw fee amounts to standardized USD values for consistent reporting  
- **Logic**: Take the USDC fee amounts extracted from token transfers and apply decimal correction to convert from wei-denominated values to human-readable amounts. Convert USDC amounts to USD using end-of-day price feeds, though for USDC this conversion is typically 1:1. Truncate timestamps to daily boundaries and aggregate fees by chain, market sector, business segment, and other dimensional attributes.
- **Key fields**: Converted `amount` values, daily `timestamp` boundaries, `chain_id` for Arbitrum, and categorical fields for business classification

### Final aggregation
- **Combining components**: The processed trading fees are aggregated at the daily level across all option strategies and underlying assets. Each fee record is classified with standard business categorization including chain ID (`arbitrum`), business line (`Options trading`), market sector (`derivatives`), and business segment (`option`).
- **Currency conversion**: All USDC fee amounts are converted to USD using end-of-day price feeds and corrected for token decimal precision to ensure accurate monetary values
- **Time aggregation**: Fees are aggregated to daily boundaries using timestamp truncation, with the day serving as the primary time grain for reporting
- **Final calculation**: Supply-side fees are explicitly set to 0 for all records regardless of the underlying trading fee amounts. This reflects Hegic's protocol design where all trading fees flow to the protocol treasury rather than being distributed to liquidity providers or market makers. The methodology captures and processes all trading activity but assigns none of the resulting fees to the supply side.

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

Portion of fees distributed to service providers or supply-side participants.

HegicHEGIC

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown