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 Fees Methodology

## 1. Overview

Fees measures the total value paid by users to execute swaps on Orca. These fees are distributed to liquidity providers as supply-side fees and to the protocol treasury as protocol revenue. The overall economic value generated by Orca's automated market maker (AMM) products, including Whirlpools and Orca Token Swap V2, is represented by this metric.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Orca Token Swap V2 fee rate determination

- **Purpose**: Determination of trade and protocol fee rates for Orca Token Swap V2 pools.
- **Logic**: Fee rates are extracted from `Initialize` of the `TokenSwapV2` program. The total trade fee rate is calculated as the sum of the liquidity provider fee rate and the protocol fee rate. The protocol fee share and supply-side fee share are determined by dividing the respective fee rate by the total trade fee rate.
- **Key fields**: `pool_address`, `lp_fee_rate`, `protocol_fee_rate`, `trade_fee_rate`, `protocol_fee_share`, `supply_side_fee_share`

### Component B: Whirlpools fee rate determination

- **Purpose**: Determination of trade and protocol fee rates for Whirlpools pools, accounting for both static and adaptive fee tiers.
- **Logic**: Fee rates are determined using two methods depending on data availability. For pools and periods where actual transaction logs are available, fee rates are extracted directly from `Traded` in the `Whirlpool` program logs, where the trade fee rate is calculated as the sum of the liquidity provider fee and protocol fee divided by the input amount. For periods without direct log coverage, modeled fee rates are applied by coalescing pool-specific rates (from `SetFeeRate` and `SetProtocolFeeRate` from the `Whirlpool` program) with default rates (from `InitializeFeeTier`, `SetDefaultFeeRate`, `InitializeAdaptiveFeeTier`, `SetDefaultBaseFeeRate`, `InitializeConfig`, and `SetDefaultProtocolFeeRate` from the `Whirlpool` program) based on the pool's initialization timestamp.
- **Key fields**: `pool_address`, `trade_fee_rate`, `protocol_fee_share`, `supply_side_fee_share`

### Component C: Trade volume tracking

- **Purpose**: Tracking of raw trading volume for Orca Token Swap V2 and Whirlpools pools.
- **Logic**: Trade records are filtered by program ID to isolate transactions interacting with the Whirlpools program (`whirLbMiicVdio4qvUfM5KAg6Ct8VwpYzGff3uctyCc`) and the Orca Token Swap V2 program (`9W959DqEETiGZocYWCQPaJ6sBmUzgfxXfqGeTEdp3aQP`). Raw trade amounts for both assets in a pool are extracted and normalized by their respective decimal precisions. The direction of the trade is determined to correctly map the input and output assets.
- **Key fields**: `pool_address`, `amount_0`, `amount_1`, `token_address_0`, `token_address_1`, `a_to_b`

### Component D: USD conversion and fee calculation

- **Purpose**: Conversion of trading volumes to USD and calculation of total fees.
- **Logic**: Normalized trade amounts are multiplied by end-of-day asset prices from external price feeds. To prevent valuation distortions from illiquid assets, the total USD trading volume of a swap is determined as the lesser of the USD values of the two trading legs, except for trades involving tokenized stocks where the stock leg's valuation is prioritized. Total fees are calculated by multiplying the USD trading volume by the determined trade fee rate for each pool. Fees are then aggregated to a daily granularity with UTC day boundaries.
- **Key fields**: `trading_volume`, `trade_fee_rate`, `fees`, `timestamp`

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

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

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