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

Katana is a non-custodial exchange protocol built on Ronin. Katana was founded by Sky Mavis and launched in 2021.

The Ronin team own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue).

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Katana (Ronin)

# Katana Earnings Methodology

## 1. Overview

Katana earnings represents the net profit generated by the Katana decentralized exchange (DEX) on the Ronin blockchain. The metric follows the standard business formula: earnings = revenue - expenses. Revenue is calculated as Ronin's share of trading fees collected from AMM swaps, while expenses currently consist of token incentives (set to zero). This metric answers the question: "How much profit does the Katana protocol generate after accounting for operational expenses?"

## 2. Data sources

- **Blockchain events**: Parsed Ronin `Pair_Swap_event` logs from Katana v1 AMM contracts containing trade execution data
- **Contract events**: Ronin `Factory_PairCreated_event` logs from Katana v1 factory contracts defining trading pairs and fee structures  
- **Transaction data**: Ronin transaction records providing user addresses and transaction context
- **External data**: End-of-day token price feeds for USD conversion of trading amounts
- **Token metadata**: Token decimals, symbols, and standard information for amount normalization

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculate daily USD trading volumes for all Katana trading pairs
- **Logic**: Extract `Pair_Swap_event` logs from Katana v1 contracts on Ronin blockchain. For each swap event, calculate the net change in both tokens by subtracting `amount0Out` from `amount0In` and `amount1Out` from `amount1In`. Take absolute values to handle both buy and sell directions. Correct token amounts using token-specific decimal places by dividing by 10 raised to the token's decimal count. Join with trading pair metadata to get token addresses and fee tiers. Aggregate by day, trading pair, and transaction details.
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out` from swap events, `token0_address`, `token1_address` from pair metadata, `decimals` from token metadata

### Component B: USD conversion and manipulation protection  
- **Purpose**: Convert token amounts to USD values while preventing price manipulation
- **Logic**: Join aggregated token amounts with end-of-day price feeds for both tokens in each trading pair. Multiply token amounts by respective USD prices to get USD values for each token. Apply manipulation protection by taking the lesser of the two USD values using the `least()` function. This prevents inflated volumes from manipulated or stale prices. Sum volumes by day and trading pair to get final daily trading volumes.
- **Key fields**: `price_usd` from price feeds, calculated `token0_amount` and `token1_amount` in USD terms, final `trading_volume` as the lesser value

### Component C: Fee calculation
- **Purpose**: Calculate total fees collected from trading activity
- **Logic**: Multiply daily trading volumes by the corresponding fee tier for each trading pair. Fee tiers are defined in the trading pairs dimension, with Katana v1 using a 0.3% fee (0.003 fee tier) derived from Factory_PairCreated_event logs. Sum fees across all trading pairs and days to get total fee collection.
- **Key fields**: `fee_tier` from trading pair metadata (0.003 for 0.3% fee), calculated `fees` as trading volume multiplied by fee tier

### Component D: Revenue calculation  
- **Purpose**: Determine Ronin's share of collected trading fees
- **Logic**: Apply the protocol fee share of 1/6 (approximately 16.67%) to total fees collected. This represents the portion of trading fees that accrue to the Ronin protocol rather than liquidity providers. Multiply total fees by the hardcoded protocol fee share to calculate daily revenue.
- **Key fields**: Protocol fee share constant (1/6), calculated `revenue` as fees multiplied by protocol share

### Component E: Expenses calculation
- **Purpose**: Account for protocol operational expenses
- **Logic**: Currently set token incentives to zero for all time periods, meaning Katana has no token-based expenses. Expenses are derived from the token incentives metric, which is hardcoded as zero in the calculation logic.
- **Key fields**: `token_incentives` (always 0), `expenses` equal to token incentives

### Final aggregation
- **Combining components**: Revenue and expenses are calculated separately and then combined using the earnings formula: earnings = revenue - expenses
- **Currency conversion**: All amounts are already in USD from the trading volume calculation step using end-of-day price feeds
- **Time aggregation**: Data is aggregated at the daily level using timestamp truncation to day boundaries
- **Final calculation**: Since expenses are zero, earnings equals revenue, which is 1/6 of the total trading fees collected by Katana AMM pairs on Ronin blockchain

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

Katana (Ronin)

Earnings

Earnings

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