# Polymarket International Cost of revenue Methodology

## 1. Overview

Cost of revenue measures the expenses Polymarket International incurs when outsourcing liquidity provision incentives to third-party market makers. Specifically, maker rebates paid out to liquidity providers to maintain order book depth and efficiency are tracked. These payments are distributed from designated distributor contracts on Polygon and are classified as a cost of revenue.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from Polymarket International rebate distributor contracts, covering Polygon
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Maker rebate transfer extraction

- **Purpose**: Identify and extract maker rebate payments distributed to liquidity providers.
- **Logic**: ERC-20 `Transfer` events are parsed from specific Polymarket International rebate distributor addresses on Polygon. Transfers are filtered to include only those originating from the designated maker rebate distributor addresses, excluding any return transfers to the protocol wallet. Only transfers of USDC and pUSD assets are captured.
- **Key fields**: `block_timestamp`, `token_address`, `amount`, `from_address`, `to_address`

### Component B: Cost of revenue aggregation

- **Purpose**: Filter and aggregate the extracted transfers specifically for maker rebates.
- **Logic**: The extracted transfers are filtered to isolate those labeled as maker rebates, excluding taker rebates. The transfer amounts are aggregated by day, chain, product, and asset.
- **Key fields**: `amount`, `rebate_type`

### Component C: Normalization and USD conversion

- **Purpose**: Normalize asset amounts and convert them to USD.
- **Logic**: Asset amounts are normalized by decimal precision using asset metadata. The normalized amounts are then multiplied by end-of-day asset prices to determine the USD value. Daily values are aggregated using UTC day boundaries, and any missing days are zero-filled.
- **Key fields**: `cost_of_revenue`, `price_usd`

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

Expenses paid to third parties to deliver core service output.

Cost of revenue

Prediction markets

Liquidity providers deposit funds into Polymarket and receive trading fees from traders (supply-side fees). Polymarket has also launched a new peer-to-peer order book with no liquidity providers involved.

Polymarket is a non-custodial prediction market protocol built on Polygon. Polymarket was founded by Shayne Coplan and launched in 2020.

Polymarket team & investors own and govern the protocol. They do not currently take a cut of the total trading fees paid by traders (revenue). Polymarket's investors include Polychain, 1Confirmation, ParaFi Capital, etc.

Polymarket International

Cost of revenue

Cost of revenue

Chain breakdown