# Pendle AMM Supply-side fees Methodology

## 1. Overview

Supply-side fees for Pendle AMM are calculated as the share of swap fees distributed to liquidity providers. The compensation earned by service providers for facilitating trading activity within the automated market maker pools is represented by this metric. These fees are calculated as the total swap fees collected minus the portion retained as protocol revenue.

## 2. Data sources

- **Blockchain events**: `Swap` events from `MarketV2`, `MarketV3`, `MarketV4`, `MarketV5`, `MarketV6`, and `MarketV7` contracts, plus `Deposit` events from `SYv2`, `SYv3`, `SYv4`, `SYv5`, `SYv6`, and `SYv7` contracts, covering Ethereum, Arbitrum, Base, BSC, and 8 other chains
- **External data**: End-of-day price feeds for underlying assets

## 3. Step-by-step calculation

### Component A: AMM swap fee extraction

- **Purpose**: Capture the raw fee amounts generated from swap activity within Pendle AMM pools
- **Logic**: `Swap` events are parsed from the various versions of the Pendle Market contracts. The `netSyFee` field is extracted to identify the fee amount paid in Standardized Yield (SY) assets for each transaction.
- **Key fields**: `netSyFee` (fee amount), `address` (market identification), `block_timestamp` (timing)

### Component B: Standardized Yield (SY) price normalization

- **Purpose**: Determine the conversion ratio between SY assets and their underlying base assets to ensure accurate valuation
- **Logic**: `Deposit` events are parsed from SY asset contracts to track the relationship between the amount of base assets deposited and the amount of SY assets minted. A daily ratio is calculated by dividing the total base asset amount by the total SY asset amount per market. This ratio is used to normalize fee amounts into the equivalent value of the underlying base asset.
- **Key fields**: `amountDeposited`, `amountSyOut`, `address` (SY contract address)

### Component C: Supply-side fee allocation

- **Purpose**: Calculate the specific portion of fees allocated to liquidity providers after the protocol take is deducted
- **Logic**: Total fees are first determined by multiplying the raw fee amount from Component A by the normalization ratio from Component B. Protocol revenue is then calculated as 80% of these total swap fees. Supply-side fees are derived by subtracting the protocol revenue from the total fees, resulting in a 20% allocation to the liquidity providers.
- **Key fields**: `fee_amount` (total fees), `revenue` (protocol share)

### Component D: USD conversion and aggregation

- **Purpose**: Normalize all fee values to USD for cross-chain and cross-asset comparison
- **Logic**: Normalized asset amounts are adjusted by decimal precision and multiplied by end-of-day price feeds. Values are aggregated to daily totals using UTC day boundaries.
- **Key fields**: `block_timestamp` (day truncation), `chain_id` (chain identification)

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

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

Supply-side fees

Exchanges (DEX)

Users deposit yield-bearing tokens into Pendle Markets. The yield-bearing token is wrapped and split up into its principal and yield-bearing components, which allows users to execute yield-trading strategies (i.e. earn fixed yield, long yield). Traders pay a swap fee whenever yield-bearing tokens are swapped with its wrapped, principal, or yield-bearing component tokens.

Pendle is a permissionless yield-trading protocol built on Ethereum, HyperEVM, Arbitrum, BNB Chain, Optimism, Base, Berachain, Sonic, Plasma, Monad, X Layer, and Robinhood Chain. Pendle was founded by TN Lee and was launched in 2021.

PENDLE tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue).

Pendle AMM

Supply-side fees

Supply-side fees

Chain breakdown