Lenders deposit funds into Moonwell and receive interest payments from borrowers (supply-side fees).

Moonwell is a non-custodial lending protocol built on multiple blockchains.

WELL tokenholders own and govern the protocol. They currently take a cut of the total interest + liquidation fees paid by borrowers (revenue).

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Moonwell

# Moonwell Supply-side fees Methodology

## 1. Overview

Moonwell supply-side fees represent the portion of platform fees that are distributed to liquidity suppliers (lenders) rather than retained by the protocol. This metric measures the daily fee income earned by users who supply assets to Moonwell lending pools. The calculation combines two fee sources: interest-based fees from borrowing activity and liquidation-based fees from liquidation events. These fees are calculated by applying governance-determined fee splits to track what portion flows to suppliers versus the protocol treasury.

## 2. Data sources

- **Interest accrual events**: Parsed `AccrueInterest` events from Moonwell mToken contracts on Base and Optimism chains, containing accumulated interest amounts from borrower payments
- **Liquidation events**: Parsed `LiquidateBorrow` events from Moonwell mToken contracts on Base and Optimism chains, containing collateral seizure amounts and addresses
- **Governance parameter events**: Parsed events tracking fee-splitting parameters including `NewReserveFactor`, `NewLiquidationIncentive`, and `NewProtocolSeizeShare` events from Base and Optimism Moonwell contracts
- **Market state data**: Moonwell protocol state data mapping mToken contract addresses to their underlying token addresses and providing exchange rates between mTokens and underlying tokens
- **Token metadata**: Token information including symbols and decimal precision for proper amount scaling
- **End-of-day price feeds**: Daily token price data for USD conversion of all fee amounts

## 3. Step-by-step calculation

### Component A: Interest-based supply-side fees
- **Purpose**: Calculate supplier fees generated from borrower interest payments
- **Logic**: Extract daily interest accrual events from Moonwell mToken contracts on Base and Optimism. For each `AccrueInterest` event, the `interest_accruals` field contains the total interest accumulated. Join with market dimension data to map mToken addresses to underlying token addresses. Apply reserve factor splitting by joining with time-series reserve factor data that tracks governance changes to fee splits. Calculate supply-side fees as interest amount multiplied by (1 - reserve_factor), meaning suppliers receive the portion not retained by the protocol. Adjust amounts by dividing by token decimal precision to get proper token quantities.
- **Key fields**: `interest_accruals` (total interest earned), `reserve_factor` (protocol's share of fees), `token_address` (underlying asset), `account_address` (mToken contract)

### Component B: Liquidation-based supply-side fees  
- **Purpose**: Calculate supplier fees generated from liquidation penalty distributions
- **Logic**: Extract daily liquidation events from Moonwell contracts tracking `LiquidateBorrow` events. For each liquidation, the `amount_seized` represents collateral tokens taken from the liquidated borrower. Join with market dimensions to identify the collateral token type and get exchange rates between mTokens and underlying tokens. Join with time-series liquidation incentive data to get the total liquidation bonus and protocol seize share parameters. Convert seized mToken amounts to underlying token amounts using exchange rates. Calculate supply-side fees as: seized amount × (liquidation incentive - protocol seize share) × exchange rate. This represents the portion of liquidation penalty that flows to suppliers rather than the protocol.
- **Key fields**: `amount_seized` (collateral tokens seized), `liquidation_incentive_mantissa` (total liquidation bonus rate), `protocol_seize_mantissa` (protocol's share of liquidation bonus), `exchange_rate` (mToken to underlying conversion)

### Final aggregation
- **Combining components**: Union the interest-based and liquidation-based fee components, both structured with the same schema including timestamp, chain, token address, and fee amounts
- **Currency conversion**: Apply USD conversion using the `convert_to_usd_and_correct_decimals` macro with end-of-day token prices, converting native token amounts to USD values for the `fees_supply_side` field
- **Time aggregation**: Aggregate all fee amounts by day using timestamp truncation, with daily boundaries determined by UTC timezone
- **Final calculation**: Apply the `finalize_metric_fees_supply_side` macro to standardize the output format, fill any missing days with zeros, and add standard metadata fields including market sector, business segment, and product identifiers

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

Portion of fees distributed to service providers or supply-side participants.

MoonwellWELL

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown