Liquidity providers deposit funds into Perpetual Protocol to earn a share of trading fees (supply-side fees). Perpetual Protocol leverages Uniswap v3's architecture as a pricing engine, enabling traders to access up to 10x leverage. Perpetual Protocol also offers Hot Tub vaults, which operate trading strategies that generate yield from arbitrage profits. 

Perpetual Protocol is an open-source and non-custodial exchange for perpetual contracts built on Optimism. Perpetual Protocol was founded by Shao-Kang Lee & Yenwen Feng and launched in 2019.

PERP token holders own and govern the protocol. Token holders can boost their governance power and earn 15% of trading fees paid by traders (revenue) by locking PERP into vote-escrowed PERP (vePERP). Perpetual Protocol's investors include CMS Holdings, Binance Labs, and Mechanism Capital.

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Perpetual Protocol

# Perpetual Protocol Fees Methodology

## 1. Overview

The Perpetual Protocol fees metric measures the total fees generated by the protocol from trading and liquidation activities across its v1 (Gnosis) and v2 (Optimism) deployments. This metric captures fee revenue from users opening, closing, and modifying perpetual trading positions, as well as fees collected during position liquidations. The calculation aggregates fees from blockchain events, converts them to USD, and presents them as daily totals across different market segments.

## 2. Data sources

- **Blockchain events**: Parsed `PositionChanged` and `PositionLiquidated` events from Perpetual Protocol's ClearingHouse contracts on Gnosis (v1) and Optimism (v2) networks
- **Event data fields**: Fee amounts (`fee` and `liquidationFee` fields), market addresses (`amm` and `baseToken` fields), account addresses, and transaction metadata
- **External data**: End-of-day price feeds for USD conversion of fee token values
- **Market metadata**: Hardcoded mapping of market contract addresses to their corresponding token symbols (e.g., vBTC, vETH, ETHUSDC)
- **Token data**: Native token addresses for fee denomination (xDAI on Gnosis, USDC on Optimism)

## 3. Step-by-step calculation

### Component A: Trading fee extraction
- **Purpose**: Captures fees from users opening, closing, or modifying perpetual trading positions
- **Logic**: Extracts data from `PositionChanged` events on both Gnosis and Optimism networks. For Gnosis v1, uses the `fee` field from events targeting the `amm` market address. For Optimism v2, uses the `fee` field from events targeting the `baseToken` market address. Normalizes all fee amounts by dividing by 10^18 to account for token decimals. Categorizes these fees with a "Trading" component label to distinguish from liquidation fees.
- **Key fields**: `fee` (fee amount), `amm`/`baseToken` (market identifier), `address` (user account), `block_timestamp` (event timing)

### Component B: Liquidation fee extraction  
- **Purpose**: Captures fees collected when user positions are liquidated due to insufficient margin
- **Logic**: Extracts data from `PositionLiquidated` events on both Gnosis and Optimism networks. For Gnosis v1, uses the `liquidationFee` field from events targeting the `amm` market address. For Optimism v2, uses the `liquidationFee` field from events targeting the `baseToken` market address. Normalizes all fee amounts by dividing by 10^18 to account for token decimals. Categorizes these fees with a "Liquidation" component label to distinguish from trading fees.
- **Key fields**: `liquidationFee` (liquidation fee amount), `amm`/`baseToken` (market identifier), `address` (liquidated account), `block_timestamp` (liquidation timing)

### Component C: Market enrichment
- **Purpose**: Associates market contract addresses with human-readable token symbols for proper categorization
- **Logic**: Uses a hardcoded mapping that translates market contract addresses to token symbols. This mapping includes virtual tokens (vBTC, vETH, etc.) for v1 markets and direct trading pairs (ETHUSDC, BTCUSDC, etc.) for v2 markets. When a market address cannot be matched to the mapping, it defaults to "Unknown" symbol. This enrichment enables proper grouping and identification of fees by trading pair.
- **Key fields**: `address` (market contract address), `token_symbol` (corresponding token identifier)

### Component D: Data combination and standardization
- **Purpose**: Combines trading and liquidation fees into a unified dataset with consistent formatting
- **Logic**: Unions the trading fee and liquidation fee datasets while preserving the component distinction. Applies dimensional categorization by setting `market_sector_id` to "derivatives", `business_segment_id` to "perpetual", and `business_line` to "Perpetual trading". Truncates timestamps to daily boundaries and sets the timestamp grain to "day". Maintains chain-specific token addresses (xDAI for Gnosis, USDC for Optimism) and version labels (v1 for Gnosis, v2 for Optimism).
- **Key fields**: `timestamp` (daily boundary), `chain_id` (network identifier), `component` (Trading or Liquidation), `amount` (normalized fee amount)

### Final aggregation
- **Combining components**: Sums all fee amounts from both trading and liquidation components, grouped by day, chain, market sector, business segment, and product dimensions
- **Currency conversion**: Converts fee amounts to USD using end-of-day price feeds, with the conversion applied to the native fee tokens (xDAI on Gnosis, USDC on Optimism)
- **Time aggregation**: Groups fees by daily timestamps, ensuring all fees within a calendar day are aggregated together
- **Final calculation**: Applies the `finalize_metric_fees` macro with a "fill_zeros" strategy to standardize the output format, ensure consistent time series data, and fill any missing periods with zero values. The result represents total daily fee revenue in USD across all Perpetual Protocol markets and chains.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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