# Whirlpools Token incentives Methodology

## 1. Overview

Token incentives measures the value of native ORCA assets distributed to liquidity providers within the Whirlpools product. These incentives are primarily utilized to bootstrap liquidity and compensate stakeholders for providing capital to concentrated liquidity pools. The metric reflects the protocol's ongoing distribution of its native asset, functioning similarly to stock-based compensation in traditional finance.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Reward vault identification

- **Purpose**: Identify the specific on-chain accounts designated for distributing ORCA incentives.
- **Logic**: `InitializeReward` and `InitializeRewardV2` instructions from `Whirlpool` programs are parsed to identify reward vaults. A filter is applied to include only those vaults where the reward mint matches the ORCA asset address (`orcaEKTdK7LKz57vaAYr9QeNsVEPfiu6QeMU1kektZE`). This ensures that the metric only captures native token distributions and excludes other assets incentivized by external parties.
- **Key fields**: `rewardVault`, `rewardMint`

### Component B: Emission rate tracking

- **Purpose**: Determine the quantity of ORCA assets distributed per second for each pool.
- **Logic**: `SetRewardEmissions` and `SetRewardEmissionsV2` instructions from `Whirlpool` programs are monitored to track changes in distribution rates. The `emissionsPerSecondX64` value is extracted and converted from a fixed-point format by dividing the value by 2 to the power of 64. This normalized rate represents the number of raw units distributed per second for a specific reward index within a whirlpool.
- **Key fields**: `emissionsPerSecondX64`, `rewardIndex`, `whirlpool`

### Component C: Daily incentive accrual

- **Purpose**: Calculate the total amount of ORCA distributed over daily intervals.
- **Logic**: A daily time spine is utilized to calculate the duration between instruction timestamps. The quantity of incentives is determined by multiplying the active emission rate by the number of seconds elapsed within each 24-hour UTC window. This time-weighted approach accounts for changes in emission rates that occur mid-day.
- **Key fields**: `block_timestamp`, `emissions_per_second`

### Component D: Normalization and USD conversion

- **Purpose**: Convert native asset quantities into a standardized USD value.
- **Logic**: Daily incentive totals are normalized by the decimal precision of the ORCA asset. These quantities are multiplied by end-of-day price feeds. Final values are aggregated by product and chain, with a zero-filling strategy applied to ensure a continuous data series for the Whirlpools product.
- **Key fields**: `timestamp`, `token_incentives`, `price_usd`

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

Value of native tokens distributed as incentives.

Token incentives

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.