# USDC Reserve Income Fees Methodology

## 1. Overview

Fees for USDC Reserve Income are measured as the gross reserve yield generated by the USDC assets backing HyperCore under the Aligned Quote Asset (AQA V2) framework. This economic value is generated on the total backing USDC balance using the effective federal funds rate as a reference rate. The total fees generated by the reserve assets are represented by the calculated yield before any protocol revenue splits or cost adjustments are applied.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events for USDC, covering HyperEVM
- **External data**: Effective federal funds rate from the Federal Reserve Bank of New York

## 3. Step-by-step calculation

### Component A: USDC Reserve Income balance tracking

- **Purpose**: Track the daily balances of the Aligned Quote Asset (AQA V2) deployer addresses on HyperEVM.
- **Logic**: ERC-20 `Transfer` events for USDC are parsed on HyperEVM to identify transfers involving the treasury deployer and technical deployer addresses. Daily net flows are calculated by subtracting outgoing transfers from incoming transfers for each address. Daily balances are then calculated by aggregating these net flows over time. The total backing balance is calculated as the sum of the balances of both deployer addresses.
- **Key fields**: `timestamp` (timing), `from_address` (sender), `to_address` (recipient), `value` (transfer amount)

### Component B: USDC Reserve Income reference rate retrieval

- **Purpose**: Retrieve and prepare the reference interest rate.
- **Logic**: The effective federal funds rate is retrieved from the Federal Reserve Bank of New York. Rates published on business days are applied to subsequent non-business days to ensure a continuous daily rate series.
- **Key fields**: `timestamp` (date), `rate_percentage` (interest rate)

### Component C: USDC Reserve Income gross reserve yield calculation

- **Purpose**: Calculate the daily gross reserve yield as the Fees metric for USDC Reserve Income.
- **Logic**: The daily gross reserve yield is calculated by multiplying the total backing USDC balance by the daily reference rate, and the result is divided by 365. This gross yield is mapped to the USDC Reserve Income product. Amounts are normalized by decimal precision.
- **Key fields**: `backing_balance` (total USDC balance), `reference_rate` (federal funds rate), `gross_reserve_yield` (calculated fees)

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

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

Fees

Derivative exchanges

Hyperliquid generates revenue through on-chain perpetual futures and spot trading, facilitated by its HyperCore execution layer. Every order, trade, and liquidation occurs on-chain with one-block finality, enabling ultra-low latency and transparent trading. Liquidity providers and market makers earn supply-side fees from bid-ask spreads and transaction rebates, while network participants can earn governance and staking rewards via the HYPE token.

Hyperliquid is a layer-one (L1) blockchain purpose-built for trading and decentralized finance. It combines: HyperCore, the high-performance trading engine powering perpetuals, spot markets, and oracles; HyperEVM, a fully compatible smart contract layer enabling developers to build DeFi applications such as lending, vaults, governance, bridges, and stablecoins directly on-chain. Its consensus mechanism, HyperBFT, is a custom algorithm inspired by HotStuff, optimized for throughput (200k+ orders/sec) and deterministic finality. The HYPE token underpins the network, granting holders rights to participate in governance, staking, and securing the protocol — effectively letting users own a share of the Hyperliquid ecosystem.

HYPE tokenholders own, govern, and secure the Hyperliquid network through on-chain governance. The Hyper Foundation oversees community governance and ecosystem growth, ensuring decentralization and alignment of incentives across traders, builders, and validators. Hyperliquid’s investors include Tioga Capital Partners, Collab+Currency, Infinite Capital (San Juan), Optimista Capital, and RockawayX, all holding minority venture capital positions.

USDC Reserve Income

Fees

Fees

Chain breakdown