Hop allows users to send tokens from one rollup to another almost immediately without having to wait for the rollup’s challenge period. Liquidity providers deposit funds into Hop AMM pools and receive trading fees from traders (supply-side fees).

Hop is a scalable rollup-to-rollup general token bridge. Hop was co-founded by Christopher Whinfrey and launched in 2021.

HOP tokenholders own and govern the protocol. They currently take a cut of the total transfer fees paid by users (revenue). Hop’s investors include 1confirmation, Infinite Capital, etc.

governance

github

twitter

discord

etherscan

website

Bridges

Hop Protocol

# Hop Protocol Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of trading fees that go to liquidity providers (LPs) in Hop's Automated Market Maker (AMM) pools. This metric calculates the total fees earned by LPs from token swaps executed through Hop's L2 AMM contracts across multiple chains. The calculation applies a fixed LP fee rate of 0.04% to all trading volume, capturing the revenue that incentivizes liquidity provision in Hop's cross-chain bridge infrastructure.

## 2. Data sources

The methodology relies on the following raw data sources:

- **Blockchain events**: Parsed `TokenSwap` events from Hop's L2 AMM contracts deployed on Polygon, Arbitrum, Optimism, and Base networks
- **Contract data**: Hop L2 AMM smart contract addresses and their associated token pools (USDC, DAI, ETH, USDT, WBTC, MATIC, MAGIC, RETH, SNX, SUSD)
- **Token metadata**: Token decimal specifications and contract addresses for proper unit conversion
- **External data**: End-of-day token price feeds for USD conversion
- **Transaction data**: Block timestamps and transaction hashes for temporal organization

## 3. Step-by-step calculation

### Component A: Trade execution extraction

- **Purpose**: Extract and standardize swap transaction data from Hop's L2 AMM contracts across multiple chains
- **Logic**: The system identifies `TokenSwap` events from specific Hop L2 AMM contracts on four chains (Polygon, Arbitrum, Optimism, Base). Each chain has multiple AMM contracts, one for each supported token (USDC, DAI, ETH, USDT, WBTC, and chain-specific tokens like MATIC on Polygon, MAGIC on Arbitrum, SNX/SUSD on Optimism). For each swap event, the system extracts the `tokensSold` amount which represents the trading volume for that transaction. The data is enriched with chain information, token metadata, and contract version details.
- **Key fields**: `tokensSold` (raw trading amount), `token_symbol` (token identifier), `token_address` (contract address), `block_timestamp` (transaction time), `transaction_hash` (transaction identifier), `account_address` (AMM contract address)

### Component B: LP fee calculation

- **Purpose**: Calculate the liquidity provider fees by applying a fixed fee rate to trading volumes
- **Logic**: A standardized LP fee percentage of 0.0004 (0.04%) is applied to all trading amounts regardless of token or chain. This fee rate represents the portion of each trade that goes to liquidity providers as compensation for providing capital to the AMM pools. The calculation multiplies each `tokensSold` amount by this fixed percentage to determine the raw fee amount in the original token denomination.
- **Key fields**: `lp_fee_percentage` (fixed at 0.0004), `trading_amount` (standardized from `tokensSold`), `fees_supply_side` (calculated fee amount)

### Component C: Currency conversion and standardization

- **Purpose**: Convert raw token amounts to USD values with proper decimal correction
- **Logic**: The system corrects for token decimal places using metadata (e.g., USDC uses 6 decimals, ETH uses 18 decimals) to convert raw blockchain integers to human-readable amounts. End-of-day token price feeds are then applied to convert these corrected amounts to USD values. This ensures all fees are expressed in a common currency unit for aggregation and comparison.
- **Key fields**: Decimal-corrected amounts, USD conversion rates, standardized USD fee values

### Final aggregation

- **Combining components**: Trading volume data from multiple AMM contracts is combined with the fixed LP fee rate to calculate individual transaction fees, which are then aggregated at the daily level
- **Currency conversion**: All fees are converted to USD using end-of-day price feeds after correcting for token decimal places
- **Time aggregation**: Transactions are grouped by day using timestamp truncation, with all fees within each day summed together
- **Final calculation**: The final supply-side fees value equals the sum of (trading_amount × 0.0004 × USD_price) for all swaps within each day, expressed in USD with proper decimal correction applied

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

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

Hop ProtocolHOP

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown