Liquidity providers deposit funds into Notional and receive trading fees from borrowers & lenders (supply-side fees).

Notional is a non-custodial fixed-rate, fixed-term lending protocol built on Ethereum. Notional was founded by Jeff Wu & Teddy Woodward and launched in 2020.

NOTE holders own and govern the protocol. They currently take a cut of the total trading fees paid by borrowers & lenders and all of the COMP incentives from funds deposited to Compound (revenue). Notional’s investors include Coinbase Ventures, Nascent Ventures, 1Confirmation, etc.

github

twitter

discord

etherscan

website

Lending

Notional Finance

# Notional Finance Average revenue per user (ARPU) Methodology

## 1. Overview

Average Revenue Per User (ARPU) for Notional Finance measures the average daily revenue generated per active user. This metric is calculated by dividing total daily revenue by the number of daily active users (DAU). The calculation combines fee accruals from Notional's lending operations with COMP token rewards earned through integration with Compound Finance, providing insight into the protocol's revenue efficiency per user.

## 2. Data sources

The ARPU calculation relies on the following raw data sources:

- **Notional Router smart contract events**: Parsed Ethereum events from Notional's Router contract including `LendBorrowTrade_event` (for trading activity) and `nTokenSupplyChange_event` (for liquidity provision activity), plus `ReserveFeeAccrued_event` for fee collection
- **Compound V2 protocol events**: Parsed Ethereum events from Compound's Comptroller contract including `DistributedBorrowerComp_event` and `DistributedSupplierComp_event` for COMP token reward distributions
- **Token price feeds**: End-of-day price feeds for USD conversion of revenue amounts
- **Token metadata**: Configuration data for proper decimal handling and token address mapping for Compound LP tokens (cETH, cDAI, cUSDC, cWBTC)

## 3. Step-by-step calculation

### Component A: Daily active users calculation

- **Purpose**: Identify and count unique users interacting with Notional Finance daily
- **Logic**: Extract user addresses from Notional Router events on Ethereum, categorizing users as either 'Trader' (from `LendBorrowTrade_event`) or 'LP' (from `nTokenSupplyChange_event`). Group events by daily timestamps and count distinct user addresses using HyperLogLog aggregation to handle large-scale user counting efficiently. The system creates multiple dimensional breakdowns including project-level, chain-level, user-type-level, and product-level aggregations
- **Key fields**: `account` field from events becomes `user_address`, `block_timestamp` for daily grouping, `user_type` classification, and final `user_dau` count

### Component B: Revenue collection and processing

- **Purpose**: Calculate total daily revenue from fee accruals and COMP token rewards
- **Logic**: Combine two revenue streams: first, extract fee amounts from `ReserveFeeAccrued_event` where the `currencyId` field maps to specific Compound LP token addresses through an allowlist (currency ID 1=cETH, 2=cDAI, 3=cUSDC, 4=cWBTC). Second, capture COMP token rewards from Compound's distributor events where Notional's distributor address (`0x1344a36a1b56144c3bc62e7757377d288fde0369`) receives COMP tokens from both borrower and supplier distribution events. Convert all revenue amounts to USD using end-of-day price feeds and apply proper decimal corrections based on token specifications
- **Key fields**: `fee` amounts from reserve events, `compDelta` from COMP distribution events, `token_address` for price lookup, converted `revenue` in USD

### Final aggregation

- **Combining components**: Join daily user counts with daily revenue totals by matching on timestamp (daily boundaries) and relevant dimensions like chain and product
- **Currency conversion**: All revenue amounts are converted to USD using end-of-day token price feeds, with proper decimal adjustments applied based on each token's decimal configuration
- **Time aggregation**: Both user and revenue data are aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: ARPU is computed by dividing total daily revenue (in USD) by the daily active user count for each day, with a zero-filling strategy applied to handle days with no activity or missing data

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

Notional FinanceNOTE

Average revenue per user (ARPU)

Average revenue per user (ARPU)

Competitive landscape