# vePendle Supply-side fees Methodology

## 1. Overview

Supply-side fees are measured as the portion of protocol fees generated by Pendle that is distributed to vePendle lockers. These fees are collected from across various Pendle products, including Pendle AMM, Pendle Limit Order, and Pendle Yield Tokenization, and are subsequently routed to the vePendle distribution contracts. The yield earned by users whose Pendle assets are locked for participation in protocol governance and receipt of a share of the protocol's economic activity is represented by this metric.

## 2. Data sources

- **Blockchain events**: ERC-20 token transfers to vePendle distributor and treasury contracts, covering Ethereum, Arbitrum, Base, Berachain, and 6 other chains
- **External data**: End-of-day price feeds for transferred assets and Standardized Yield (SY) exchange rate data

## 3. Step-by-step calculation

### Component A: vePendle distribution tracking

- **Purpose**: The value of assets transferred to vePendle lockers through the protocol's distribution infrastructure is identified.
- **Logic**: ERC-20 token transfers are parsed to identify inflows to the vePendle distributor address and treasury addresses. A filter is applied to exclude USDT transfers to avoid double-counting primary fees that are processed through the airdrop distributor. Transactions between the treasury and distributor are flagged to ensure individual fee events are not counted multiple times.
- **Key fields**: `to_address` (recipient identification), `value` (asset quantity), `token_address` (asset identification).

### Component B: Standardized Yield (SY) asset conversion

- **Purpose**: Pendle-specific Standardized Yield assets are converted into their underlying asset values.
- **Logic**: For transfers involving SY assets, the quantity is multiplied by the corresponding exchange rate. These rates are derived from Standardized Yield exchange rate data, where the ratio between the SY asset and its underlying base asset is tracked. If an asset is not an SY asset, a default rate of one is applied.
- **Key fields**: `sy_address` (SY asset identifier), `rate` (exchange rate to underlying asset).

### Component C: USD conversion and aggregation

- **Purpose**: All collected fees are normalized into a common currency for reporting.
- **Logic**: Asset amounts are normalized by decimal precision based on asset metadata. The resulting quantities are multiplied by end-of-day price feeds for each specific asset. Supply-side fees are then aggregated by day and chain, whereby the net value flowing to service providers (vePendle lockers) after protocol revenue allocations are accounted for is calculated.

*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).

vePendle

Supply-side fees

Supply-side fees

Chain breakdown