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 Expenses Methodology

## 1. Overview

The expenses metric for Polynomial Protocol measures token incentives paid out by the protocol to users. Currently, Polynomial Protocol does not distribute token incentives, so this metric returns zero values across all time periods and chains. The metric maintains the same dimensional structure as the protocol's fee data to ensure consistency in reporting schemas.

## 2. Data sources

The metric uses the dimensional structure from Polynomial's fee collection system, which is built from:

- **Synthetix v2 perpetual contract events**: Parsed `PerpsTracking` and `PositionModified` events from Optimism blockchain for multiple Synthetix ProxyPerpsV2 contract versions
- **Polynomial advanced order events**: Parsed `ExecuteRequest`, `ExecuteLimitOrder`, and `ExecutePairOrder` events from Polynomial's v1 contracts on Optimism
- **End-of-day price feeds**: Token price data for USD conversion
- **Token metadata**: Information for sUSD token used in perpetual trading

## 3. Step-by-step calculation

### Component A: Fee data structure extraction
- **Purpose**: Create the dimensional framework (time, chain, product) for the expenses metric
- **Logic**: The calculation starts by referencing the fee collection system which aggregates perpetual trading fees from Synthetix v2 contracts and Polynomial's advanced order contracts. Trading fees are identified by filtering Synthetix events for Polynomial's specific tracking code and collecting fees from Polynomial's own order execution events. All fee data uses sUSD token on Optimism chain and is aggregated by day
- **Key fields**: The structure includes `timestamp` (daily), `chain_id` (Optimism), `product_id` (null for perpetual trading), and fee amounts

### Component B: Token incentives calculation  
- **Purpose**: Calculate actual token incentives paid by the protocol
- **Logic**: Instead of calculating actual incentive payments from blockchain data, the system hardcodes all token incentive values to zero. This reflects Polynomial Protocol's current state of not distributing token rewards to users. The zero values are applied across all time periods and dimensional combinations present in the fee data structure
- **Key fields**: `token_incentives` field is set to 0 for all records, maintaining the dimensional structure from fee data

### Final aggregation
- **Combining components**: The zero token incentives are processed through the finalization macro which ensures proper schema validation, fills any temporal gaps with zeros, and adds protocol metadata
- **Currency conversion**: No currency conversion is needed since all values are zero
- **Time aggregation**: Data is aggregated at daily grain matching the fee data structure
- **Final calculation**: The `token_incentives` field is renamed to `expenses` to create the final expenses metric, with all values remaining zero. Chain availability filtering is applied to ensure data is only reported for supported chains

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

Total project operating and incentive expenses.

Polynomial Protocol

Expenses

Expenses

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