Users are able to use the Orca protocol to transact with digital assets on a peer-to-peer or peer-to-protocol basis by trading against liquidity  pools, which are created and seeded by other users providing liquidity of a pair of tokens into such liquidity pools in exchange for a stake of the liquidity and trading fees generated by such pools.

Orca is a non-custodial automated market maker (AMM) protocol built on Solana. Orca was founded by Yutaro Mori and Grace Kwan and launched in 2021.

ORCA tokenholders govern the Orca protocol treasury, which receives a portion of the trading fees paid by users of the protocol.

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Orca

Orca | Data Breakdown

# Orca Earnings Methodology

## 1. Overview

Earnings is defined as the net value a project retains after subtracting all expenses from its revenue. For Orca, earnings is calculated by subtracting protocol expenses from protocol revenue. Protocol revenue is generated from a portion of trading fees collected across Whirlpools and Orca Token Swap V2, while expenses are represented by on-chain token incentives distributed to liquidity providers. This metric reflects the on-chain profitability of the protocol, though true costs may be understated if off-chain operating expenses are not reported on-chain.

## 2. Data sources

- **Blockchain events**: `InitializePool`, `InitializePoolV2`, `InitializePoolWithAdaptiveFee`, `SetFeeRate`, `SetProtocolFeeRate`, `InitializeConfig`, `SetDefaultProtocolFeeRate`, `InitializeFeeTier`, `SetDefaultFeeRate`, `InitializeAdaptiveFeeTier`, `SetDefaultBaseFeeRate`, `InitializeReward`, `InitializeRewardV2`, `SetRewardEmissions`, and `SetRewardEmissionsV2` from the `Whirlpool` program, `Initialize` from the `TokenSwapV2` program, and `Traded` from the `Whirlpool` program, covering Solana
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Whirlpools trading volume and fee rates

- **Purpose**: Determine trading volume and fee rates for Whirlpools.
- **Logic**: Trade records are filtered for the Whirlpools program (program account `whirLbMiicVdio4qvUfM5KAg6Ct8VwpYzGff3uctyCc`). Pool metadata is resolved using `InitializePool`, `InitializePoolV2`, and `InitializePoolWithAdaptiveFee` from the `Whirlpool` program. Default trade fee rates and protocol fee shares are extracted from `InitializeFeeTier`, `SetDefaultFeeRate`, `InitializeAdaptiveFeeTier`, `SetDefaultBaseFeeRate`, `InitializeConfig`, and `SetDefaultProtocolFeeRate` from the `Whirlpool` program based on the pool initialization timestamp. Pool-specific fee overrides are applied using `SetFeeRate` and `SetProtocolFeeRate` from the `Whirlpool` program. For pools and days where `Traded` from the `Whirlpool` program is parsed from log messages, the modeled trade fee rates are replaced with actual charged rates calculated by dividing the sum of liquidity provider and protocol fees by the input amount, and the protocol fee shares are replaced with actual charged shares calculated by dividing protocol fees by the sum of liquidity provider and protocol fees.
- **Key fields**: `input_amount`, `lp_fee`, `protocol_fee`, `trade_fee_rate`, `protocol_fee_share`

### Component B: Orca Token Swap V2 trading volume and fee rates

- **Purpose**: Determine trading volume and fee rates for Orca Token Swap V2.
- **Logic**: Trade records are filtered for the Orca Token Swap V2 program (program account `9W959DqEETiGZocYWCQPaJ6sBmUzgfxXfqGeTEdp3aQP`). Pool metadata, including vault accounts, is established using `Initialize` from the `TokenSwapV2` program. Liquidity provider and protocol fee rates are extracted from the same initialization instructions to calculate the total trade fee rate and the protocol fee share.
- **Key fields**: `lp_fee_rate`, `protocol_fee_rate`, `trade_fee_rate`, `protocol_fee_share`

### Component C: Protocol revenue calculation

- **Purpose**: Calculate the protocol's share of trading fees in USD.
- **Logic**: Trading volumes for each pool are converted to USD using end-of-day price feeds. For each trade, the volume is multiplied by the trade fee rate and the protocol fee share to calculate protocol revenue. Daily revenue is aggregated across all pools.
- **Key fields**: `trading_volume`, `trade_fee_rate`, `protocol_fee_share`, `revenue`

### Component D: Whirlpools token incentives calculation

- **Purpose**: Calculate the USD value of ORCA asset incentives distributed to Whirlpools liquidity providers.
- **Logic**: Reward vaults for the ORCA asset (mint account `orcaEKTdK7LKz57vaAYr9QeNsVEPfiu6QeMU1kektZE`) are identified using `InitializeReward` and `InitializeRewardV2` from the `Whirlpool` program. Emission rates are extracted from `SetRewardEmissions` and `SetRewardEmissionsV2` from the `Whirlpool` program and adjusted for fixed-point representation. Daily emissions are calculated by multiplying the emission rate by the active duration of the emission configuration. The resulting asset amounts are normalized by decimal precision and converted to USD using end-of-day price feeds.
- **Key fields**: `emissions_per_second`, `token_incentives`

### Component E: Earnings derivation

- **Purpose**: Calculate net earnings for the protocol.
- **Logic**: Protocol expenses (token incentives) are subtracted from protocol revenue on a daily basis. If expenses exceed revenue, negative net earnings are recorded.
- **Key fields**: `revenue`, `expenses`, `earnings`

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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