# Whirlpools Expenses Methodology

## 1. Overview

The total cost incurred by a project to operate its business is measured by the Expenses metric. For the Whirlpools product on Orca, this metric is represented by the value of ORCA asset incentives distributed to liquidity providers. These incentives are allocated to bootstrap liquidity and facilitate trading activity. On-chain reward emission rates are tracked, normalized by decimal precision, and converted to USD to calculate the final metric.

## 2. Data sources

- **Blockchain events**: `InitializeReward`, `InitializeRewardV2`, `SetRewardEmissions`, and `SetRewardEmissionsV2` from the `Whirlpool` program, covering Solana
- **External data**: End-of-day price feeds for the ORCA asset

## 3. Step-by-step calculation

### Component A: Whirlpools reward vault identification

- **Purpose**: To identify the specific reward vaults associated with the ORCA asset.
- **Logic**: The `InitializeReward` and `InitializeRewardV2` from the `Whirlpool` program are parsed. These instructions are filtered to isolate instances where the reward mint matches the official ORCA asset account (`orcaEKTdK7LKz57vaAYr9QeNsVEPfiu6QeMU1kektZE`). Unique reward vault accounts are extracted to establish a reference list of vaults distributing ORCA incentives.
- **Key fields**: `rewardVault`, `rewardMint`

### Component B: Whirlpools emission rate tracking

- **Purpose**: To track the active emission rates of ORCA incentives over time.
- **Logic**: The `SetRewardEmissions` and `SetRewardEmissionsV2` from the `Whirlpool` program are parsed. These instructions are joined with the identified ORCA reward vaults to filter out non-ORCA rewards. The emission rate is extracted and calculated by dividing the raw emissions per second value by 2 raised to the power of 64. The active time window for each emission rate is determined by ordering the instructions chronologically and using the subsequent instruction's timestamp as the end of the window.
- **Key fields**: `block_timestamp`, `rewardVault`, `rewardIndex`, `whirlpool`, `emissionsPerSecond`

### Component C: Whirlpools daily incentive calculation

- **Purpose**: To calculate the daily volume of ORCA incentives emitted.
- **Logic**: A daily timestamp spine is generated, and the active emission rate windows are mapped to each day. The duration in seconds that an emission rate was active during each UTC day is calculated. This active duration is multiplied by the corresponding emission rate to determine the raw daily emission amount per pool. These daily amounts are summed and normalized by the asset's decimal precision.
- **Key fields**: `timestamp`, `rewardVault`, `rewardIndex`, `whirlpool`, `token_incentives`

### Component D: USD conversion and final aggregation

- **Purpose**: To convert the daily ORCA incentives to USD and aggregate them as expenses.
- **Logic**: The daily normalized ORCA incentive amounts are multiplied by the end-of-day price of the ORCA asset. These USD values are mapped to the Whirlpools product on Solana. The daily values are aggregated to produce the final daily Expenses metric, and a zero-filling strategy is applied to ensure continuous daily data.
- **Key fields**: `timestamp`, `token_incentives`, `expenses`

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

Total project operating and incentive expenses.

Expenses

Exchanges (DEX)

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.