# Jupiter Lend Cost of revenue Methodology

## 1. Overview

Cost of revenue measures the portion of Jupiter Lend's revenue shared with Fluid, the underlying lending infrastructure provider. Jupiter Lend is operated under a revenue-sharing agreement where 50% of all protocol-captured interest income is allocated to Fluid as an infrastructure expense. These payments represent the costs incurred for outsourcing the core lending engine to a third-party service provider.

## 2. Data sources

- **Blockchain instructions**: `Operate`, `UpdateTokenConfig`, `UpdateRateDataV1`, and `UpdateRateDataV2` instructions from the `Liquidity` program on Solana
- **External data**: Asset metadata and end-of-day price feeds

## 3. Step-by-step calculation

### Component A: Interest rate parameter tracking

- **Purpose**: Capture the configuration variables required to model interest rate curves for each asset.
- **Logic**: `UpdateRateDataV1` and `UpdateRateDataV2` instructions from the `Liquidity` program are parsed to identify interest rate parameters. These include utilization kinks and interest rates at zero, kink, and maximum utilization levels. These parameters are used to determine the applicable interest rate for any given utilization level.
- **Key fields**: `kink`, `rate_at_utilization_zero`, `rate_at_utilization_kink`, and `rate_at_utilization_max`

### Component B: Interest accrual calculation

- **Purpose**: Calculate the gross interest generated by borrowed assets before protocol fees are applied.
- **Logic**: `Operate` instructions from the `Liquidity` program are analyzed to track running borrow and supply balances for each asset. Utilization is calculated as the ratio of active loans to total supply. Interest is accrued between instructions by applying the interest rate derived from the curve parameters to the borrow balance. Compound interest is calculated based on the time delta between consecutive operations.
- **Key fields**: `borrow_amount`, `supply_amount`, and `block_timestamp`

### Component C: Revenue and cost of revenue determination

- **Purpose**: Identify the protocol's share of interest and the subsequent allocation to the infrastructure provider.
- **Logic**: Protocol fee rates are extracted from `UpdateTokenConfig` instructions from the `Liquidity` program. Gross accrued interest is multiplied by this fee rate to determine protocol revenue. Cost of revenue is then calculated by applying a 50% allocation to the protocol revenue, representing the share distributed to Fluid. All values are normalized by decimal precision and converted to USD using end-of-day price feeds.
- **Key fields**: `fee`, `interest_accrued_this_period`, and `revenue`

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

Expenses paid to third parties to deliver core service output.

Cost of revenue

Lending

Jupiter aggregates liquidity from multiple non-custodial exchanges. Integrators set custom fees. Liquidity providers deposits funds into the perpetual exchange. Both receive fees from traders (supply-side fees).

Jupiter is a non-custodial DEX aggregator and exchange for perpetual contracts built on Solana. Jupiter was founded by an pseudonymous founder meow and launched in 2021.

JUP token holders own and govern the protocol. They currently take a cut of the total perpetual and integrator trading fees paid by traders (revenue). Jupiter's investors include White Hilt Capital, etc.
