Liquidity providers deposit funds into IDEX and receive trading fees from traders (supply-side fees).

IDEX is hybrid-liquidity DEX, combining a high-performance order book with an Automated Market Making matching engine, built on Polygon. IDEX was founded by Alex Wearn and launched in 2019.

IDEX tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). IDEX's investors include Gnosis, Collider Ventures, Borderless Capital, G1 Ventures, etc.

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# IDEX Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of trading fees that goes to liquidity providers in IDEX's decentralized exchange. This metric calculates the fees earned by liquidity providers from both AMM pools and order book trading, applying different fee splits based on the business line and time period. The calculation captures trading activity across IDEX's hybrid exchange model on Polygon, distinguishing between AMM and order book trades and applying protocol-specific fee distribution rules.

## 2. Data sources

- **Polygon blockchain events**: Parsed IDEX v3 exchange contract event logs including `PoolTradeExecuted`, `OrderBookTradeExecuted`, and `HybridTradeExecuted` events
- **Token metadata**: Hardcoded mappings for quote asset tokens (USDC and ETH) with their contract addresses on Polygon
- **Trade event data**: Contains trade amounts in raw format (measured in "pips"), asset symbols, taker/maker designation, and timestamp information

## 3. Step-by-step calculation

### Component A: Trade data extraction and processing
- **Purpose**: Extract and normalize trading activity from IDEX v3 contract events on Polygon
- **Logic**: The system processes three types of trade events from IDEX v3 contracts. `PoolTradeExecuted` events capture pure AMM trades, `OrderBookTradeExecuted` events capture pure order book trades, and `HybridTradeExecuted` events capture hybrid trades that execute against both AMM pools and order books simultaneously. For hybrid trades, both the AMM component (`poolbaseQuantityInPips`, `poolquoteQuantityInPips`) and order book component (`orderBookbaseQuantityInPips`, `orderBookquoteQuantityInPips`) are extracted as separate records. Only taker-side trades are included by filtering for records where `takerSide` equals 1. Raw trade amounts are converted from "pips" format by dividing by 10^8 to get actual token amounts.
- **Key fields**: `baseQuantityInPips` and `quoteQuantityInPips` (converted to `token0_amount` and `token1_amount`), `baseAssetSymbol` and `quoteAssetSymbol` (for token identification), `takerSide` (for filtering), `block_timestamp` (for daily aggregation)

### Component B: Quote asset filtering and volume calculation
- **Purpose**: Filter trades for specific quote assets and aggregate trading volumes
- **Logic**: Trades are joined with a dimension table containing approved quote assets, currently limited to USDC (`0x2791bca1f2de4661ed88a30c99a7a9449aa84174`) and ETH (`0x7ceb23fd6bc0add59e62ac25578270cff1b9f619`) on Polygon. Only trades where the `token1_symbol` (quote asset) matches these approved quote assets are included. Trading volumes are aggregated by day using `timestamp_trunc` on the block timestamp, summing the `token1_amount` field (quote asset amounts) to get total daily trading volume.
- **Key fields**: `token1_symbol` (for quote asset matching), `token1_amount` (aggregated as trading volume), truncated daily timestamp

### Component C: Fee calculation
- **Purpose**: Calculate total fees generated from trading activity
- **Logic**: Total fees are calculated by multiplying the daily trading volume by a fixed fee tier of 0.0025 (0.25%). This represents the total fee charged on trades before any splits between protocol and liquidity providers.
- **Key fields**: `trading_volume` (from aggregated quote asset amounts), fixed `fee_tier` of 0.0025

### Component D: Supply-side fee allocation
- **Purpose**: Calculate the portion of fees that goes to liquidity providers based on business line and time period
- **Logic**: The supply-side fee allocation varies by business line and has changed over time for AMM trades. Order book trades (`Exchange Order Book` business line) generate 0% supply-side fees, meaning all fees go to the protocol. AMM trades (`Exchange AMM` business line) have time-dependent allocations: 80% of fees go to liquidity providers for trades before February 4, 2023, and 40% of fees go to liquidity providers for trades on or after February 4, 2023. The remaining percentage goes to the protocol as revenue.
- **Key fields**: `business_line` (for determining fee split rules), `timestamp` (for time-based fee tier changes), calculated `fees_supply_side`

### Final aggregation
- **Combining components**: The calculation flows sequentially through trade extraction, volume aggregation, fee calculation, and supply-side allocation without complex joins between components
- **Currency conversion**: The `finalize_metric_fees_supply_side` macro handles USD conversion using end-of-day price feeds and applies standard decimal corrections
- **Time aggregation**: Daily aggregation is performed at the trading volume level using timestamp truncation to day boundaries
- **Final calculation**: Supply-side fees equal trading volume × 0.0025 × supply-side percentage, where the supply-side percentage is 0% for order book trades, 80% for AMM trades before February 4, 2023, and 40% for AMM trades after February 4, 2023

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

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

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Supply-side fees

Supply-side fees

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