Overcollateralized borrowers deposit funds into Liquity and receive LUSD stablecoin.

Liquity is a non-custodial stablecoin protocol built on Ethereum. Liquity was founded by Robert Lauko & Rick Pardoe and launched in 2020.

LQTY tokenholders own & govern the protocol. They currently take all of the total borrow & redemption fees paid by borrowers (revenue). Liquity’s investors include Lemniscap, Polychain, Alameda Research, etc.

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Liquity

# Liquity Revenue Methodology

## 1. Overview

Liquity revenue represents the total fees earned by the Liquity protocol from its core lending operations. This metric captures revenue from two primary sources: borrowing fees paid when users mint LUSD stablecoin against ETH collateral, and redemption fees paid when users redeem LUSD directly for ETH from the protocol. The calculation aggregates these fee streams daily and converts them to USD, providing a comprehensive view of Liquity's protocol revenue generation.

## 2. Data sources

- **Ethereum event logs**: Parsed `LUSDBorrowingFeePaid` events from the Liquity v1 BorrowerOperations contract containing LUSD-denominated borrowing fees
- **Ethereum event logs**: Parsed `Redemption` events from the Liquity v1 TroveManager contract containing ETH-denominated redemption fees  
- **Token price feeds**: End-of-day price feeds for LUSD and WETH tokens for USD conversion
- **Token metadata**: Decimal specifications for LUSD (18 decimals) and WETH (18 decimals) tokens

## 3. Step-by-step calculation

### Component A: Borrowing fees collection
- **Purpose**: Captures fees paid by users when borrowing LUSD against ETH collateral
- **Logic**: Extracts all `LUSDBorrowingFeePaid` events from the Liquity BorrowerOperations contract on Ethereum. Each event contains the `LUSDAFee` field representing the fee amount paid in LUSD tokens. Events are enriched with standard metadata including chain identifier, business segment classification as stablecoin issuer, and version identifier as v1.
- **Key fields**: `LUSDAFee` amount field, `block_timestamp` for timing, `transaction_hash` and `log_index` for uniqueness, hardcoded LUSD token address `0x5f98805a4e8be255a32880fdec7f6728c6568ba0`

### Component B: Redemption fees collection  
- **Purpose**: Captures fees paid by users when redeeming LUSD directly for ETH from the protocol
- **Logic**: Extracts all `Redemption` events from the Liquity TroveManager contract on Ethereum. Each event contains the `ETHFee` field representing the fee amount paid in WETH tokens. Events are enriched with the same metadata structure as borrowing fees for consistency.
- **Key fields**: `ETHFee` amount field, `block_timestamp` for timing, `transaction_hash` and `log_index` for uniqueness, hardcoded WETH token address `0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2`

### Component C: Fee stream combination and processing
- **Purpose**: Combines both fee types into a unified daily fee dataset
- **Logic**: Unions borrowing fees and redemption fees into a single dataset with daily timestamp truncation. Each fee record maintains its original token denomination (LUSD or WETH) and includes consistent metadata fields for business segment classification, chain identification, and product versioning.
- **Key fields**: Combined `fees` amounts, daily `timestamp` boundaries, `token_address` for price lookup, standardized business segment fields

### Final aggregation
- **Combining components**: Borrowing fees in LUSD and redemption fees in WETH are combined through a union operation, maintaining separate token contexts for accurate price conversion
- **Currency conversion**: Fee amounts are converted to USD using end-of-day token price feeds, with decimal correction applied based on 18-decimal precision for both LUSD and WETH tokens
- **Time aggregation**: All fees are aggregated to daily boundaries using timestamp truncation, ensuring consistent daily reporting periods
- **Final calculation**: The processed and USD-converted fees are directly used as revenue through a one-to-one mapping, with gap-filling applied to ensure complete daily coverage using zero values for dates without fee activity

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

LiquityLQTY

Revenue

Revenue

Competitive landscape

Chain breakdown