Polynomial Protocol builds on top of Synthetix to create a synthetic perpetuals trading platform. Traders on Polynomial trade futures against the liquidity provided by liquidity providers on Synthetix, with liquidity providers receiving trading fees (supply-side fees).

Polynomial Protocol is a non-custodial exchange for perpetual contracts built on Optimism. Polynomial Protocol was founded by Gautham Santhosh, Salman Naseer Ahmed, & Mubaris NK, and their flagship product Polynomial Trade was launched in 2023.

The Polynomial team own and govern the protocol. Polynomial’s investors include Archetype, Genblock Capital, Caballeros Capital, etc.

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Polynomial Protocol

# Polynomial Protocol Average fees per user (AFPU) Methodology

## 1. Overview

Average Fees Per User (AFPU) measures the average daily fees generated per active user on Polynomial Protocol, a derivatives trading platform built on Synthetix infrastructure. The metric is calculated by dividing total daily fees by daily active users, providing insight into user monetization efficiency. Polynomial operates on Optimism and offers perpetual trading through both standard market orders and advanced order types like limit orders.

## 2. Data sources

The calculation relies on several blockchain and external data sources:

- **Synthetix event logs**: Parsed `PerpsTracking` and `PositionModified` events from Synthetix v2 perpetual contracts on Optimism, which capture trading activity and associated fees
- **Polynomial event logs**: Parsed advanced order events including `ExecuteRequest`, `ExecuteLimitOrder`, and `ExecutePairOrder` from Polynomial v1 contracts on Optimism
- **End-of-day token price feeds**: Price data for sUSD token conversion to USD
- **Token metadata**: Decimal precision information for proper token amount conversion

## 3. Step-by-step calculation

### Component A: User identification and counting
- **Purpose**: Identify and count daily active users trading through Polynomial Protocol
- **Logic**: The system first filters Synthetix `PerpsTracking` events for transactions containing Polynomial's specific tracking code (`0x706f6c796e6f6d69616c00000000000000000000000000000000000000000000`). This identifies transactions routed through Polynomial's interface. Using these filtered transaction hashes, the system then captures user addresses from corresponding `PositionModified` events for market orders and from Polynomial's own advanced order events for limit orders. All users are classified as 'Trader' type with market sector 'derivatives' and business segment 'perpetual'. Daily aggregation uses HyperLogLog sketching to efficiently count distinct users across multiple dimensional breakdowns including project-level, chain-level, user-type-level, and product-level views.
- **Key fields**: `account` or `user` addresses from events, `trackingCode` for filtering, `block_timestamp` for daily aggregation, `transaction_hash` for cross-referencing

### Component B: Fee collection and aggregation
- **Purpose**: Collect and aggregate all fees generated through Polynomial Protocol trading
- **Logic**: Fees are collected from two primary sources. First, perpetual trading fees are extracted from Synthetix `PositionModified` events, but only for transactions that match the allowlisted transaction hashes from the tracking code filter. This ensures only Polynomial-routed trades are included. Second, advanced order fees are collected directly from Polynomial's own contract events including limit orders and pair orders. All fees are initially denominated in sUSD token. The system aggregates these fees daily, applies decimal correction to convert from raw token amounts to proper decimal representation, then converts to USD using end-of-day price feeds. Daily aggregation occurs across the same dimensional breakdowns as users.
- **Key fields**: `fee` and `totalFee` amounts from events, sUSD token address (`0x8c6f28f2f1a3c87f0f938b96d27520d9751ec8d9`), `block_timestamp` for daily grouping

### Final aggregation
- **Combining components**: The `calculate_arpu` macro divides the aggregated daily fees by the corresponding daily active user counts, matching on timestamp and dimensional breakdowns. This creates the average fees per user metric.
- **Currency conversion**: All fee amounts are converted from sUSD to USD using end-of-day price feeds after applying proper decimal correction for the sUSD token
- **Time aggregation**: Both fees and users are truncated to daily boundaries using the start of each day in UTC timezone
- **Final calculation**: AFPU = Total Daily Fees (USD) ÷ Daily Active Users, with the `finalize_metric_afpu` macro applying standardized metadata, zero-filling for missing dates, and ensuring consistent time series output across all dimensional breakdowns

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

Polynomial Protocol

Average fees per user (AFPU)

Average fees per user (AFPU)

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