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 Fees Methodology

## 1. Overview

Polynomial fees represent the total daily revenue generated by the Polynomial Protocol from perpetual trading activities on Optimism. This metric captures fees from two primary sources: (1) perpetual trading fees collected through Synthetix v2 perpetual contracts where Polynomial acts as a referral partner, and (2) advanced order execution fees from Polynomial's own smart contracts for limit orders and other advanced trading features. The calculation aggregates these fee streams on a daily basis and converts all amounts to USD.

## 2. Data sources

The metric relies on several raw data sources:

- **Synthetix v2 event logs**: Parsed `PerpsTracking` and `PositionModified` events from Synthetix perpetual trading contracts (versions v2, v21, and v22) deployed on Optimism
- **Polynomial v1 event logs**: Parsed `ExecuteRequest`, `ExecuteLimitOrder`, and `ExecutePairOrder` events from Polynomial's advanced order contracts on Optimism  
- **End-of-day price feeds**: Token price data for converting sUSD denominated fees to USD
- **Token metadata**: Decimal precision information for proper amount calculations

## 3. Step-by-step calculation

### Component A: Perpetual trading fees from Synthetix integration

- **Purpose**: Captures fees earned by Polynomial as a referral partner when users trade perpetuals through Synthetix v2 contracts
- **Logic**: The calculation identifies Polynomial-specific transactions by filtering `PerpsTracking` events using Polynomial's unique tracking code (`0x706f6c796e6f6d69616c00000000000000000000000000000000000000000000`). These tracking events are then joined with corresponding `PositionModified` events from the same transactions to extract the actual fee amounts. This join ensures only fees from trades initiated through Polynomial's interface are captured. The process covers three versions of Synthetix perpetual contracts (v2, v21, v22) all deployed on Optimism.
- **Key fields**: `trackingCode` for filtering Polynomial transactions, `transaction_hash` for joining events, `fee` amount from position modifications, `block_timestamp` for daily aggregation

### Component B: Advanced order fees from Polynomial contracts

- **Purpose**: Captures fees from advanced trading features like limit orders and pair orders executed directly through Polynomial's smart contracts
- **Logic**: The calculation extracts fee data from three types of events emitted by Polynomial v1 contracts on Optimism. `ExecuteRequest` events capture fees from basic limit order executions, while `ExecuteLimitOrder` and `ExecutePairOrder` events capture fees from more sophisticated order types. All events contain a `totalFee` field representing the fee amount collected by the protocol for executing these advanced order types.
- **Key fields**: `totalFee` representing the fee amount charged for order execution, `block_timestamp` for daily aggregation, contract `address` for identifying fee recipients

### Final aggregation

- **Combining components**: The two fee streams are combined using a union operation, creating a single dataset containing all fee-generating activities across both Synthetix partnership fees and direct Polynomial advanced order fees
- **Currency conversion**: All fees are originally denominated in sUSD (Synthetix USD, token address `0x8c6f28f2f1a3c87f0f938b96d27520d9751ec8d9`). These amounts are converted to USD using end-of-day price feeds, with proper decimal correction applied to ensure accurate conversion from the token's native decimal precision
- **Time aggregation**: Block timestamps are truncated to daily boundaries using day-level truncation. Each day's fees are summed to produce daily totals
- **Final calculation**: The metric represents the total daily USD value of all fees collected by Polynomial Protocol, including both referral fees from Synthetix perpetual trading and direct fees from advanced order execution. Missing days are filled with zero values to ensure complete time series data.

*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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