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

Merkle Trade is a non-custodial perpetual exchange protocol built on Aptos.

MKL tokenholders own and govern the protocol. They do currently take a cut of the total trading fees paid by traders (revenue). Merkle Trade's investors include Arrington Capital, Hashed, etc.

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Merkle Trade

# Merkle Trade Token incentives Methodology

## 1. Overview

Token incentives measures the total value of MKL tokens distributed as community pool rewards on the MerkleTradeprotocol. This metric captures the monetary value of token-based incentives provided to users through MerkleTradecommunity pool claims, aggregated daily in USD. It represents the protocol's investment in user acquisition and retention through token rewards.

## 2. Data sources

- **Aptos blockchain events**: Parsed `MklClaimEvent` events from the MKL token contract on Aptos blockchain
- **Token claims data**: Specific claim events filtered for community pool distributions
- **External data**: End-of-day token price feeds for MKL token USD conversion
- **Token metadata**: Decimal precision information for accurate amount calculations

## 3. Step-by-step calculation

### Component A: MKL claim event processing
- **Purpose**: Extracts and filters MKL token claim events from Aptos blockchain
- **Logic**: Processes parsed `MklClaimEvent` events from the MKL token contract. Filters specifically for claims where `pool_type` equals 'COMMUNITY_POOL' to capture only community incentive distributions, excluding other types of token claims. Extracts key transaction metadata including block timestamp, transaction hash, and event details.
- **Key fields**: `block_timestamp` for timing, `mkl_amount` for token quantities, `pool_type` for claim categorization, hardcoded `token_address` pointing to the MKL token contract on Aptos

### Component B: Daily aggregation
- **Purpose**: Aggregates MKL token incentives by day and chain
- **Logic**: Groups claim events by day using timestamp truncation to daily boundaries. Sums all `amount` values from community pool claims within each day. Maintains chain and token address groupings to support multi-chain scenarios. Sets `product_id` to null as this metric applies protocol-wide rather than to specific products.
- **Key fields**: Daily `timestamp` boundaries, aggregated `token_incentives` amounts, `chain_id` for Aptos, `token_address` for MKL token

### Component C: USD conversion and decimal correction
- **Purpose**: Converts token amounts to USD and corrects for decimal precision
- **Logic**: Applies the `convert_to_usd_and_correct_decimals` macro to transform native MKL token amounts into USD values. Uses end-of-day price feeds to determine exchange rates for the MKL token. Corrects for token decimal precision to ensure accurate value representation. This handles the conversion from raw blockchain integer values to human-readable decimal amounts before USD conversion.
- **Key fields**: USD-denominated `token_incentives` values with proper decimal precision

### Final aggregation
- **Combining components**: The processed daily aggregations flow directly through USD conversion without additional combining steps, as the data is already grouped by day and token
- **Currency conversion**: USD conversion uses end-of-day price feeds for MKL token, applied after decimal correction to ensure accurate exchange rate calculations
- **Time aggregation**: Daily boundaries are established through timestamp truncation, with all claims within a 24-hour period aggregated together
- **Final calculation**: The metric represents the sum of all community pool MKL token claims per day, converted to USD value using end-of-day exchange rates and corrected for token decimal precision. The `finalize_metric_token_incentives` macro applies schema standardization, validates data integrity, and fills any date gaps with zero values to ensure complete time series data.

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

Value of native tokens distributed as incentives.

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