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 Notional trading volume Methodology

## 1. Overview

Polynomial notional trading volume measures the total USD value of perpetual futures trading activity facilitated by Polynomial Protocol on Optimism. This metric captures the notional value of all position modifications (opens, closes, and adjustments) in perpetual futures contracts, providing insight into trading activity and protocol usage. The calculation leverages Synthetix v2 perpetual trading infrastructure, filtering specifically for transactions attributed to Polynomial Protocol through tracking codes.

## 2. Data sources

The metric relies on several key data sources:
- **Synthetix v2 Optimism events**: Parsed `PerpsTracking` events from three contract versions (ProxyPerpsV2, ProxyPerpsV21, ProxyPerpsV22) used to identify Polynomial-attributed transactions
- **Synthetix v2 Optimism events**: Parsed `PositionModified` events from the same three contract versions containing trading volume data including trade size and execution prices  
- **End-of-day price feeds**: Token price data for USD conversion of trading volumes
- **Token metadata**: Decimal precision and contract information for sUSD (Synthetix USD) token processing

## 3. Step-by-step calculation

### Component A: Transaction allowlisting
- **Purpose**: Identify transactions attributed to Polynomial Protocol from Synthetix v2 perpetual trading events
- **Logic**: Extract `PerpsTracking` events from three Synthetix v2 contract versions on Optimism. Filter events where the `trackingCode` field matches Polynomial's identifier (`0x706f6c796e6f6d69616c00000000000000000000000000000000000000000000`). Collect distinct transaction hashes and fee amounts to create an allowlist of Polynomial-attributed transactions.
- **Key fields**: `transaction_hash` for linking transactions, `fee` amounts for additional matching criteria, `trackingCode` for protocol attribution

### Component B: Volume extraction and calculation  
- **Purpose**: Extract trading volume data from position modification events and calculate notional values
- **Logic**: Process `PositionModified` events from the same three Synthetix v2 contracts. Join these events with the transaction allowlist using both `transaction_hash` and `fee` amounts to ensure only Polynomial-attributed trades are included. For each matched event, calculate the notional trading volume by multiplying the trade size by the execution price, applying decimal normalization (dividing by 10^18 for both values), and taking the absolute value to handle both long and short positions.
- **Key fields**: `tradeSize` representing the position size change, `lastPrice` representing the execution price, `account_address` for trader identification, `block_timestamp` for timing

### Final aggregation
- **Combining components**: Join allowlisted transactions with position modification events to create a complete dataset of Polynomial trading activity
- **Volume calculation**: Calculate notional volume as absolute value of (tradeSize ÷ 10^18) × (lastPrice ÷ 10^18), representing the USD value of each trade in sUSD terms  
- **Currency conversion**: Convert sUSD amounts to USD using end-of-day price feeds through the standard conversion macro
- **Time aggregation**: Truncate timestamps to daily boundaries and group volumes by day, maintaining account-level and transaction-level granularity
- **Final calculation**: Sum all converted trading volumes by day, applying business dimension mapping (perpetual trading business line, derivatives market sector, perpetual business segment) and zero-filling logic for days with no trading activity

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

Total USD value of derivative contracts executed on the protocol.

Polynomial Protocol

Notional trading volume

Notional trading volume

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