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.

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Lending

Notional Finance

# Notional Finance Fees Methodology

## 1. Overview

The Notional Finance fees metric captures the total daily fees generated by the protocol, combining two distinct revenue streams: protocol reserve fees collected by Notional's smart contracts and COMP token incentive rewards earned through the protocol's integration with Compound Finance. This metric provides a comprehensive view of Notional's fee generation across both direct protocol fees and external incentive rewards, expressed in USD terms.

## 2. Data sources

The calculation relies on the following raw data sources:
- **Notional Router contract events**: Parsed `ReserveFeeAccrued` events from Notional V2's Router contract on Ethereum, capturing protocol fee collections with currency ID and fee amount
- **Compound Comptroller events**: Parsed `DistributedBorrowerComp` and `DistributedSupplierComp` events from Compound V2's Comptroller contract on Ethereum, tracking COMP token reward distributions
- **End-of-day price feeds**: Token price data for USD conversion of fee amounts across different tokens
- **Token metadata**: Decimal precision information for proper unit conversion of token amounts
- **Protocol configuration**: Hardcoded allowlist of supported Compound LP tokens (cETH, cDAI, cUSDC, cWBTC) with their contract addresses and currency mappings

## 3. Step-by-step calculation

### Component A: Reserve fee accruals
- **Purpose**: Captures protocol fees collected by Notional's smart contracts from lending and borrowing activities
- **Logic**: Extracts `ReserveFeeAccrued` events from Notional's Router contract on Ethereum. Each event contains a currency ID and fee amount. The raw fee amount is divided by 0.8 to account for the protocol's fee split mechanism, effectively scaling up the collected fees to represent the total fees before the split. Events are filtered and joined with the allowlisted Compound LP tokens using the `currency_id` field to map to specific token addresses. Timestamps are truncated to daily boundaries for aggregation.
- **Key fields**: `currency_id` (maps to specific tokens), `amount` (fee amount in native token units), `block_timestamp` (event timing), `chain` (always Ethereum for Notional V2)

### Component B: COMP incentive rewards  
- **Purpose**: Captures COMP token rewards earned by Notional through its integration with Compound Finance
- **Logic**: Extracts both `DistributedBorrowerComp` and `DistributedSupplierComp` events from Compound's Comptroller contract on Ethereum. Events are filtered specifically for Notional's distributor address (0x1344a36a1b56144c3bc62e7757377d288fde0369) to capture only rewards flowing to the protocol. The COMP token address is hardcoded, and amounts represent COMP tokens distributed. These events are unioned together and timestamps are truncated to daily boundaries.
- **Key fields**: `compDelta` (COMP reward amount), `borrower`/`supplier` addresses (filtered for Notional's distributor), `block_timestamp` (reward distribution timing)

### Component C: Token address mapping
- **Purpose**: Maps Notional's internal currency IDs to specific Compound LP token contract addresses
- **Logic**: Uses a hardcoded allowlist containing four supported tokens: cETH (currency ID 1), cDAI (currency ID 2), cUSDC (currency ID 3), and cWBTC (currency ID 4). This mapping enables the association of fee accruals with specific token contracts for price conversion. The join between fee accruals and this allowlist ensures only supported tokens are included in the final calculation.
- **Key fields**: `currency_id` (internal identifier), `token_address` (contract address), `token_symbol` (human-readable token name)

### Final aggregation
- **Combining components**: Both fee streams (reserve fee accruals and COMP incentives) are combined using a union operation, creating a unified dataset with consistent schema including timestamp, chain, token address, and fee amount fields
- **Currency conversion**: All fee amounts are converted to USD using end-of-day price feeds matched to the respective token addresses. The conversion process also corrects for token decimal precision to ensure proper unit handling across different tokens
- **Time aggregation**: Events are aggregated to daily boundaries using timestamp truncation, with all fees for a given day and token summed together
- **Final calculation**: The metric represents the total daily USD value of fees across all supported tokens, with missing dates filled with zeros to ensure complete time series coverage. Business segment and market sector identifiers are standardized to 'lending' for all records

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Notional FinanceNOTE

Fees

Fees

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