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 Supply-side fees Methodology

## 1. Overview

Supply-side fees for Kwenta represent the total fees collected from perpetual trading activities on the platform. Kwenta operates as a decentralized derivatives trading platform built on Synthetix infrastructure, where all collected fees are considered supply-side revenue since they represent the platform's earnings from providing trading services. The metric aggregates daily fee collection from perpetual futures trading across different synthetic asset markets on Optimism, converted to USD for standardized reporting.

## 2. Data sources

- **Synthetix contract events**: Parsed `PositionModified` events from Synthetix v1 and v2 perpetual futures contracts on Optimism, containing fee data from trading position changes
- **Synthetix tracking events**: Parsed `FuturesTracking` and `PerpsTracking` events from Synthetix contracts used to identify Kwenta-specific transactions via tracking codes
- **Synthetix market events**: Parsed `MarketAdded` events from Synthetix FuturesMarketManager contracts that establish perpetual market creation and asset mapping
- **Optimism blockchain data**: Transaction logs and event data from Synthetix protocol contracts deployed on Optimism
- **End-of-day price feeds**: Token price data for USD conversion of sUSD-denominated fees
- **Token metadata**: sUSD token configuration including decimal precision for accurate fee calculation

## 3. Step-by-step calculation

### Component A: Transaction filtering and whitelisting
- **Purpose**: Identifies Kwenta-specific transactions from Synthetix contract events
- **Logic**: Extracts transactions from Synthetix `FuturesTracking` and `PerpsTracking` events across v1 and v2 contract versions. Filters events where the `trackingCode` field matches Kwenta's specific identifier (`0x4b57454e54410000...`). This whitelisting approach ensures only fees from trades executed through Kwenta's interface are included, separating them from direct Synthetix protocol usage
- **Key fields**: `transaction_hash` for linking trades, `trackingCode` for platform identification, contract `version` for handling multiple Synthetix deployments

### Component B: Fee extraction from position events
- **Purpose**: Extracts actual fee amounts from perpetual trading position modifications
- **Logic**: Retrieves fee data from Synthetix `PositionModified` events across multiple contract versions (v1, v2, v21, v22) on Optimism. Joins position modification events with the whitelisted transactions to ensure only Kwenta-related fees are captured. Extracts the `fee` field from position events, which represents trading fees in sUSD denomination. Associates each fee with metadata including account address, business line classification as perpetual trading, and market sector as derivatives
- **Key fields**: `fee` amounts in sUSD, `account_address` as the market contract, `block_timestamp` for temporal aggregation

### Component C: Market dimension mapping  
- **Purpose**: Maps market contract addresses to readable synthetic asset names
- **Logic**: Uses Synthetix `MarketAdded` events from FuturesMarketManager contracts to establish relationships between market contract addresses and their underlying synthetic assets. Handles special cases for OP and GBP markets with hardcoded addresses, while other markets decode asset symbols from hexadecimal representations. This mapping enables proper categorization and reporting of fees by specific perpetual markets
- **Key fields**: `market` contract addresses, `asset` identifiers, decoded `synth_name` for market labeling

### Component D: Daily aggregation and market association
- **Purpose**: Combines fee data with market information and aggregates to daily totals
- **Logic**: Joins perpetual fee data with market dimensions using account addresses as market identifiers. Truncates timestamps to day boundaries for daily aggregation. Groups fees by date, chain, market sector (derivatives), business segment (perpetual), and product. Maintains token address information (sUSD) for subsequent currency conversion
- **Key fields**: Daily `timestamp`, `chain_id` for Optimism, `fees` amounts, `token_address` for sUSD

### Component E: Currency conversion and decimal correction
- **Purpose**: Converts sUSD-denominated fees to USD with proper decimal handling
- **Logic**: Applies USD conversion using end-of-day price feeds to convert sUSD fees to USD values. Corrects for token decimal precision to ensure accurate monetary amounts. Uses the `convert_to_usd_and_correct_decimals` transformation to handle both currency conversion and decimal standardization in a single step
- **Key fields**: Converted `fees` amounts in USD with corrected decimals

### Final aggregation
- **Combining components**: Fee data flows through the filtering, extraction, mapping, and conversion components sequentially, with each step building upon the previous results
- **Currency conversion**: sUSD fees are converted to USD using end-of-day price feeds with automatic decimal correction for accurate monetary representation  
- **Time aggregation**: All fees are aggregated to daily boundaries using day-truncated timestamps, ensuring consistent temporal reporting
- **Final calculation**: The supply-side fees metric directly equals the total daily fees collected, as all Kwenta fees are considered supply-side revenue. Fees are validated for proper schema compliance, ID consistency, and gaps are filled with zeros for missing dates to maintain complete time series data

*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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