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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Notional Finance

# Notional Finance Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of protocol fees that are allocated to liquidity providers (the supply side) in the Notional lending protocol. This metric captures the fees earned by users who provide liquidity to Notional's lending markets, calculated as a percentage of total protocol fees. The calculation applies a 16% fee split ratio to total fee accruals, representing the portion that flows to liquidity providers, then converts these amounts to USD for standardized reporting.

## 2. Data sources

- **Ethereum event logs**: Parsed `ReserveFeeAccrued` events from Notional v2 Router contract on Ethereum
- **Token metadata**: Hardcoded allowlist mapping Notional currency IDs to Compound LP token addresses (cETH, cDAI, cUSDC, cWBTC)
- **External data**: End-of-day token price feeds for USD conversion and token decimal information
- **Business metadata**: Protocol categorization data for lending market segments

## 3. Step-by-step calculation

### Component A: Fee accruals extraction
- **Purpose**: Extract all fee accrual events from Notional protocol to capture total fees generated
- **Logic**: Parse `ReserveFeeAccrued` events from the Notional v2 Router contract on Ethereum. Each event contains a `currencyId` field identifying the underlying asset and a `fee` field with the accrued fee amount. Apply business categorization by tagging all fees as 'Lending' business line and 'lending' market sector. Extract event metadata including `block_timestamp`, `transaction_hash`, and `log_index` for traceability.
- **Key fields**: `currencyId` (identifies the underlying asset), `fee` (raw fee amount), `block_timestamp` (event timing), `transaction_hash` and `log_index` (event identifiers)

### Component B: Token mapping and filtering
- **Purpose**: Map Notional currency IDs to specific Compound LP token addresses and filter for allowlisted tokens
- **Logic**: Join fee accrual events with an allowlisted dimension table that maps currency IDs to Compound LP tokens. The allowlist includes four tokens: cETH (currency ID 1), cDAI (currency ID 2), cUSDC (currency ID 3), and cWBTC (currency ID 4). This join filters the fee events to only include accruals from these supported lending markets and provides the token addresses needed for price conversion.
- **Key fields**: `currency_id` (join key), `token_address` (for price lookup), `token_symbol` (cETH, cDAI, cUSDC, cWBTC)

### Component C: Supply-side fee calculation
- **Purpose**: Calculate the portion of fees that flows to liquidity providers using the protocol's fee split mechanism
- **Logic**: Apply a 16% fee split ratio by dividing the total fee amount by 0.16. This calculation derives the supply-side fees from total protocol fees, representing the portion allocated to liquidity providers. The 16% represents the fee split percentage, so dividing by this factor calculates the total amount that flows to the supply side.
- **Key fields**: `amount` (total fee accrual), `fees_supply_side` (calculated supply-side portion)

### Final aggregation
- **Combining components**: Join fee accruals with token mappings on `currency_id`, then apply the fee split calculation to derive supply-side fees for each allowlisted Compound LP token
- **Currency conversion**: Convert fee amounts to USD using end-of-day token price feeds with automatic decimal correction based on each token's decimal precision
- **Time aggregation**: Truncate timestamps to daily boundaries and aggregate fees by day, chain, market sector, business segment, product, and token address
- **Final calculation**: The final metric represents daily supply-side fees in USD, calculated as the total fee accruals for allowlisted Compound LP tokens divided by the 16% fee split ratio, then converted to USD and aggregated by day. Apply zero-fill gap handling for missing data periods and chain availability filtering to ensure data quality.

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

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

Notional FinanceNOTE

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown