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 | Data Breakdown

# Orca Supply-side fees Methodology

## 1. Overview

The share of transaction fees generated by Orca that is allocated to liquidity providers is measured by the Supply-side fees metric. This metric is utilized to evaluate the economic incentives and yield potential for supply-side participants across Orca's core products, Whirlpools and Orca Token Swap V2. Through the tracking of these distributions, the protocol's capacity to attract and retain liquidity is assessed. All fees are normalized by decimal precision and converted to USD using end-of-day price feeds.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Whirlpools fee rate determination

- **Purpose**: The trade fee rate and supply-side fee share for Whirlpools pools are determined.
- **Logic**: Default trade fee rates are extracted from `InitializeFeeTier`, `SetDefaultFeeRate`, `InitializeAdaptiveFeeTier`, and `SetDefaultBaseFeeRate` instructions from `Whirlpool` programs. Default protocol fee rates are extracted from `InitializeConfig` and `SetDefaultProtocolFeeRate` instructions from `Whirlpool` programs. These default rates are applied to pools based on the rates in force at the time of pool initialization. Pool-specific overrides are captured from `SetFeeRate` and `SetProtocolFeeRate` instructions from `Whirlpool` programs. For pools and days where transaction logs are available, these modeled rates are replaced by actual charged rates extracted from `Traded` events in the transaction logs. For adaptive fee pools, the variable fee is included in these charged rates. The trade fee rate is calculated as the sum of liquidity provider fees and protocol fees divided by the input amount, and the protocol fee share is calculated as protocol fees divided by total fees. The supply-side fee share is then defined as one minus the protocol fee share.
- **Key fields**: `trade_fee_rate`, `protocol_fee_share`, `supply_side_fee_share`, `lp_fee`, `protocol_fee`, `input_amount`

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

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

### Component C: Trading volume extraction and normalization

- **Purpose**: Raw trading volumes for both products are extracted and normalized.
- **Logic**: Raw trade data is parsed from Solana decentralized exchange trade records for the Whirlpools and Orca Token Swap V2 program accounts. Base and quote asset amounts are normalized by decimal precision using asset metadata.
- **Key fields**: `base_amount`, `quote_amount`, `amount_0`, `amount_1`

### Component D: USD valuation and supply-side fee calculation

- **Purpose**: Trading volumes are converted to USD and the final supply-side fees are calculated.
- **Logic**: Normalized trading volumes are converted to USD using the lower valuation of the two trade legs, except for trades involving tokenized stocks which are valued on the stock leg. Prices are resolved using end-of-day price feeds, backup prices, or asset metadata prices. Supply-side fees are calculated by multiplying the USD trading volume by the trade fee rate and the supply-side fee share. The resulting values are aggregated daily.
- **Key fields**: `trading_volume`, `trade_fee_rate`, `supply_side_fee_share`, `fees_supply_side`

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

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

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Supply-side fees

Supply-side fees

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