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

MUX is a non-custodial exchange for perpetual contracts built on Arbitrum. The previous version of MUX was MCDEX, which was founded by Jean Miao & Liu Jie in 2021 and relaunched as MUX in Aug 2022. This dashboard does not take the MUX perpetual aggregator into account yet.

MCB tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). MUX's investors include Delphi Ventures, DeFiance Capital, Robot Ventures, etc.

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# MUX Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of MUX protocol's total trading fees that are distributed to liquidity providers rather than retained as protocol revenue. This metric measures the value flowing to the supply-side participants who provide liquidity to support perpetual trading activities. The calculation uses different fee split methodologies for MUX v1 (static percentage) and v2 (dynamic based on protocol-owned liquidity ratio).

## 2. Data sources

The calculation draws from several categories of blockchain data:

- **MUX protocol events**: Parsed `Trade`, `OpenPosition`, `ClosePosition`, and `Liquidate` events from MUX v1 and v2 liquidity pool contracts across Arbitrum, BSC, Avalanche, Fantom, and Optimism
- **GMX integration events**: Parsed `IncreasePosition`, `DecreasePosition`, `LiquidatePosition` events from GMX v1 Vault contracts on Arbitrum and Avalanche, plus `PositionFeesCollected` events from GMX v2 EventEmitter contracts
- **Gains Network integration events**: Parsed trading callback events from GNSTradingCallbacks contracts on Arbitrum and Polygon, including fee charged events for different components
- **Fee rebate transfers**: Token transfer events tracking fee rebates from GMX fee rebate sender to MUX fee rebate collector, and referral-based rebates from Gains Network
- **MUXLP token transfers**: Transfer events for MUXLP tokens to track protocol-owned liquidity amounts
- **Token metadata**: Symbol and decimal information for proper amount calculations
- **End-of-day price feeds**: Token price data for USD conversion of fee amounts

## 3. Step-by-step calculation

### Component A: Total fee collection
- **Purpose**: Aggregate all trading fees generated by MUX protocol from direct trading and aggregator integrations
- **Logic**: Collect fees from MUX native perpetual trading events (`Trade`, `OpenPosition`, `ClosePosition`, `Liquidate`) across all supported chains. Extract fee amounts from `fee`, `penalty`, and `feeUsd` parameters, typically denominated in USD with 18 decimals. Additionally include aggregator fee rebates from GMX v1 (WETH and esGMX token transfers), GMX v2 (calculated from `positionFeeAmount` and `borrowingFeeAmount` with rebate percentages), and Gains Network (percentage of `valueDai` amounts). Aggregate all fee sources by day, chain, and protocol version.
- **Key fields**: `amount` (fee amounts), `token_address` (fee token), `version` (protocol version), `chain` (blockchain network)

### Component B: Protocol-owned rate calculation (v2 only)
- **Purpose**: Calculate the percentage of MUXLP tokens owned by the MUX protocol to determine fee split
- **Logic**: Track MUXLP token transfers to identify protocol-owned liquidity. Monitor transfers to protocol address `0x18891480b9dd2ac5ef03220c45713d780b5cfdef` as positive additions to protocol supply. Track transfers from null address `0x0000000000000000000000000000000000000000` as minting and to null address as burning for total supply changes. Calculate running cumulative totals for both protocol-owned and non-protocol-owned supplies. Compute protocol-owned rate (POR) as the ratio of protocol-owned supply to total supply on each day.
- **Key fields**: `pol_amount` (protocol-owned liquidity), `nonpol_amount` (non-protocol-owned liquidity), `por_amount` (protocol-owned rate)

### Component C: Fee split application
- **Purpose**: Apply version-specific formulas to determine supply-side portion of total fees
- **Logic**: For MUX v1, apply a static fee split using the revenue percentage from dimension data (50% to revenue, 50% to supply-side since 2021-08-18). Calculate supply-side fees as total fees multiplied by (1 minus revenue percentage). For MUX v2, apply the dynamic formula: supply-side fees equals total fees multiplied by 0.7 multiplied by (1 minus POR). The 0.7 factor represents the base supply-side allocation, adjusted by the protocol ownership rate.
- **Key fields**: `revenue_percentage` (v1 split), `por_amount` (v2 protocol rate), `fees_supply_side` (calculated supply-side amount)

### Final aggregation
- **Combining components**: Join total fees with the appropriate fee split mechanism based on protocol version. Apply v1 static splits to v1 fees and v2 dynamic splits to v2 fees
- **Currency conversion**: All fee amounts are converted to USD using end-of-day token prices, with proper decimal adjustments based on token specifications
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with forward-fill strategies applied to ensure continuous time series data
- **Final calculation**: The result represents the daily USD value of trading fees allocated to liquidity providers, calculated as either total fees times (1 minus 0.5) for v1, or total fees times 0.7 times (1 minus protocol-owned rate) for v2

*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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Supply-side fees

Supply-side fees

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