Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Hydration is a Polkadot parachain specialized in trading, lending, and stablecoin issuance.

HDX holders own and govern the protocol. Hydration’s investors include KR1 plc, Hypersphere, etc.

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Hydration

# Hydration Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the share of total fees generated by Hydration that is distributed to service providers, primarily liquidity providers and stability module participants. This metric captures the compensation earned by users who provide assets to Hydration Lending or engage with the HOLLAR stability mechanism. Supply-side fees are calculated for both Hydration Lending and HOLLAR products across the Hydration ecosystem.

## 2. Data sources

- **Blockchain events**: `MintedToTreasury`, `LiquidationCall`, and `ReserveDataUpdated` events from `LendingPool` contracts, `Mint` and `Burn` events from `VToken` contracts, `ReserveFactorChanged`, `LiquidationProtocolFeeChanged`, and `ReserveInitialized` events from `LendingPoolConfigurator` contracts, ERC-20 `Transfer` events, and Substrate-based treasury accrual state data, covering Hydration Substrate and Hydration EVM
- **External data**: End-of-day price feeds for assets including native gas assets and supported lending market assets

## 3. Step-by-step calculation

### Component A: Hydration Lending interest allocation

- **Purpose**: Calculate the portion of interest paid by borrowers that is distributed to lenders (supply-side).
- **Logic**: Total interest accruals are derived from the daily change in cumulative treasury mints and substrate-level treasury accrual state data. Protocol revenue is identified as the portion captured by the treasury. The supply-side share is then back-calculated by dividing protocol revenue by the `reserve_factor` (the protocol take rate) and multiplying by the remaining percentage (1 minus the `reserve_factor`). Factors are sourced from `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `reserve_factor`, `daily_revenue`, `amount`

### Component B: Hydration Lending liquidation fees

- **Purpose**: Determine the supply-side share of fees generated during collateral liquidations.
- **Logic**: Liquidation transactions are identified through `LiquidationCall` events from `LendingPool` contracts. ERC-20 `Transfer` events of aTokens from liquidated users to the protocol treasury are captured to determine protocol revenue. Similar to interest, the supply-side portion is calculated by dividing the captured revenue by the `liquidation_factor` and multiplying by the inverse percentage. Factors are extracted from `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `liquidation_factor`, `amount` (transferred value), `to_address` (treasury)

### Component C: HOLLAR Stability Module and interest accruals

- **Purpose**: Capture the supply-side incentives for the HOLLAR stablecoin product.
- **Logic**: For the HOLLAR stability module, fees are tracked via ERC-20 `Transfer` events to and from the stability module address. A fixed 20% allocation is applied to these flows to represent the supply-side share. For HOLLAR interest accruals, which are calculated based on changes in the `variableBorrowIndex` derived from `Mint` and `Burn` events from `VToken` contracts, the supply-side fee is currently set to zero as the protocol retains the full interest amount.
- **Key fields**: `variable_borrow_index`, `cumulative_balance`, `amount` (transferred value)

### Component D: USD conversion and final aggregation

- **Purpose**: Normalize all fee components into a single USD-denominated metric.
- **Logic**: Raw asset amounts are normalized by decimal precision and multiplied by end-of-day price feeds. Values are aggregated by day, chain, and product (Hydration Lending or HOLLAR). A specific outlier filter is applied to exclude anomalous data points from historical records.
- **Key fields**: `price_usd`, `decimals`, `timestamp`

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

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

HydrationHDX

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown