# USDC Reserve Income Supply-side fees Methodology

## 1. Overview

Supply-side fees for the USDC Reserve Income product are defined as the portion of the gross USDC reserve yield that is retained by stablecoin issuers and other service providers rather than being distributed to the protocol. This metric is calculated specifically for the USDC Reserve Income product under the Aligned Quote Asset framework (AQAv2) on HyperEVM. The total supply-side fees are determined by subtracting the protocol revenue from the gross reserve yield generated by the backing USDC assets. This yield is generated based on the effective federal funds rate applied to the USDC backing HyperCore.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events for the USDC asset involving the treasury and technical deployer addresses on HyperEVM, covering HyperEVM
- **External data**: Effective federal funds rate reference feeds from the New York Fed

## 3. Step-by-step calculation

### Component A: Balance tracking for Aligned Quote Asset deployers

- **Purpose**: The daily balances of the treasury and technical deployer addresses on HyperEVM are tracked.
- **Logic**: ERC-20 `Transfer` events for the USDC asset on HyperEVM are parsed to identify transfers involving the treasury deployer (`0xc20699185c15d0a2fd65779bb5d69f5b0b113c00`) and the technical deployer (`0x6b9e773128f453f5c2c60935ee2de2cbc5390a24`). Transfer amounts are normalized by decimal precision. Net daily flows are calculated by subtracting outgoing transfer amounts from incoming transfer amounts for each address. Daily end-of-day balances are accumulated from these net flows, and a 0 UTC snapshot is established by shifting the end-of-day balance of the previous day forward. Missing daily values are carried forward from the last known balance to ensure a continuous daily series.
- **Key fields**: `block_timestamp`, `from_address`, `to_address`, `amount`

### Component B: Reference rate ingestion

- **Purpose**: The risk-free reference rate is prepared for yield calculations.
- **Logic**: The effective federal funds rate is retrieved from New York Fed data. The rate is normalized by dividing the percentage value by 100. A carry-forward operation is applied to business-day rates to ensure a continuous daily rate series across weekends and holidays.
- **Key fields**: `timestamp`, `rate_percentage`

### Component C: Gross reserve yield and protocol revenue calculation

- **Purpose**: The total yield generated and the portion allocated to the protocol are calculated.
- **Logic**: The backing balance is calculated as the sum of the treasury and technical deployer balances, while the treasury balance is tracked separately. The gross reserve yield is calculated by multiplying the backing balance by the reference rate and dividing by 365. The protocol revenue is calculated by multiplying the treasury balance by the reference rate, applying a cost adjustment scalar of 0.85 multiplied by 487 and divided by 480, and dividing by 365. These calculations are restricted to dates on or after the activation date of August 26, 2026.
- **Key fields**: `treasury_balance`, `backing_balance`, `reference_rate`, `gross_reserve_yield`, `protocol_revenue`

### Component D: Supply-side fees derivation

- **Purpose**: The final supply-side fees for the USDC Reserve Income product are determined.
- **Logic**: Supply-side fees are calculated as the difference between the gross reserve yield and the protocol revenue. This portion of the yield is retained by the stablecoin issuers and other service providers. The resulting values are aggregated daily.
- **Key fields**: `gross_reserve_yield`, `protocol_revenue`, `fees_supply_side`

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

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

Supply-side 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

Supply-side fees

Supply-side fees

Chain breakdown