Kwenta builds on top of Synthetix to create a synthetic perpetuals trading platform. Traders on Kwenta trade futures against the liquidity provided by liquidity providers on Synthetix.

Kwenta is a non-custodial exchange for perpetual contracts built on Optimism. Kwenta was born out of the Synthetix community and launched in 2022.

KWENTA tokenholders own and govern the protocol. They currently do not take a cut of the total trading fees paid by traders (revenue).

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Kwenta

# Kwenta Expenses Methodology

## 1. Overview

Kwenta expenses represents the USD value of KWENTA token incentives paid out to traders through the platform's reward system. This metric captures the cost incurred by the protocol in distributing trading rewards to users who participate in perpetual futures trading on Kwenta. The calculation aggregates daily token reward claims from Merkle distributor contracts and converts them to USD values, providing insight into the protocol's user acquisition and retention costs.

## 2. Data sources

- **Merkle distributor claim events**: Parsed `Claimed` events from `MultipleMerkleDistributor` contracts on the Optimism blockchain, covering both Kwenta v1 and v2 implementations
- **Token metadata**: Reference data containing KWENTA token information including symbol, decimal places, and contract address (`0x920cf626a271321c151d027030d5d08af699456b`)  
- **End-of-day price feeds**: Daily closing prices for KWENTA token to enable USD conversion
- **Chain availability data**: Optimism blockchain availability and data quality indicators

## 3. Step-by-step calculation

### Component A: Trading rewards extraction
- **Purpose**: Extracts raw KWENTA token reward claims from Merkle distributor contracts
- **Logic**: Collects `Claimed` events from `MultipleMerkleDistributor` contracts across Kwenta v1 and v2 deployments on Optimism. Each claim event captures when a user claims their KWENTA token trading rewards. The extraction includes transaction details (`block_timestamp`, `transaction_hash`, `log_index`), the claiming user's `address`, and the `amount` of KWENTA tokens claimed. Business classification is applied consistently: business line as "Perpetual trading", market sector as "derivatives", and business segment as "perpetual"
- **Key fields**: `block_timestamp` for timing, `address` for the reward recipient, `amount` for KWENTA tokens claimed, `chain` set to "optimism", and `version` indicating v1 or v2 protocol version

### Component B: Token metadata enrichment  
- **Purpose**: Enriches claim data with KWENTA token metadata for proper processing
- **Logic**: Joins the claim events with token reference data using the KWENTA token address and Optimism chain identifier. This adds essential token information needed for decimal corrections and USD conversion
- **Key fields**: `symbol` for the token name, decimal precision information, and validated `token_address` matching

### Component C: USD conversion and aggregation
- **Purpose**: Converts KWENTA token amounts to USD and aggregates by day
- **Logic**: Applies decimal correction to raw token amounts based on the KWENTA token's decimal precision, then converts to USD using end-of-day price feeds. Data is aggregated by truncating timestamps to daily boundaries while preserving dimensional attributes like chain, business line, version, and account address
- **Key fields**: `timestamp` truncated to day grain, `token_incentives` as the USD-converted amount, dimensional identifiers for business classification

### Final aggregation
- **Combining components**: The processed token incentives data flows directly into the expenses calculation without additional aggregation, as token incentives represent the complete set of protocol expenses
- **Currency conversion**: KWENTA token amounts are converted to USD using end-of-day price feeds with proper decimal adjustment based on the token's precision (typically 18 decimals for ERC-20 tokens)
- **Time aggregation**: Daily aggregation boundaries are established by truncating block timestamps to day level, ensuring consistent time series reporting
- **Final calculation**: The final expenses value equals the sum of all USD-converted KWENTA token incentives claimed on each day, with zero-filling applied for days with no reward claims to maintain complete time series coverage. Chain availability filtering ensures data quality by excluding periods with known blockchain data issues

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

Total project operating and incentive expenses.

KwentaKWENTA

Expenses

Expenses

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