Options buyers pay premium (supply-side fees) to liquidity providers who collaterize these option positions and cover possible profits.

Premia is an options trading protocol built on Ethereum & adjacent blockchains. Premia was founded by Anon Powered team and launched in 2021.

PREMIA tokenholders own and govern the protocol. They take a protocol fee (revenue) from options trading.

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Premia

# Premia Earnings Methodology

## 1. Overview

Earnings represents Premia's net income from options trading operations, calculated as total revenue minus total expenses. This metric measures the protocol's profitability by subtracting token incentive distributions (expenses) from trading and exercise fees collected (revenue). The calculation aggregates fees from options trading activity across multiple chains and deducts PREMIA token rewards paid to users as trading incentives.

## 2. Data sources

- **Options trading events**: Parsed Premia `Pool_Purchase_event` and `Pool_Sell_event` logs from Ethereum, Arbitrum, Fantom, and Optimism containing trading fees
- **Exercise events**: Parsed Premia `Pool_Exercise_event` logs from all four chains containing option exercise fees  
- **APY fee events**: Parsed Premia `Pool_APYFeePaid_event` logs from all four chains containing additional exercise-related fees
- **Token incentive events**: Parsed Premia `PremiaMine_Claim_event` logs from all chains containing PREMIA token reward distributions
- **Market metadata**: Parsed Premia `ProxyManager_DeployPool_event` logs providing pool-to-token mapping information
- **Token metadata**: Token addresses, symbols, and decimal configurations for proper amount normalization
- **End-of-day price feeds**: Token price data for USD conversion of fee and incentive amounts

## 3. Step-by-step calculation

### Component A: Trading fee revenue
- **Purpose**: Calculate fees collected from options purchase and sell transactions
- **Logic**: Extract trading events from `Pool_Purchase_event` and `Pool_Sell_event` logs across all supported chains. For each trade, decode the `longTokenId` parameter using bitwise division by 2^248 to determine the fee token: value 4.0 indicates underlying token, value 6.0 indicates base token. Join with market deployment events to resolve pool addresses to underlying and base token addresses. Extract fee amounts from the `feeCost` field and aggregate daily by chain, market sector, business segment, product, and token address.
- **Key fields**: `feeCost` (trading fee amount), `longTokenId` (encoded token identifier), `address` (pool address), `underlying` and `base` (token addresses from market data)

### Component B: Exercise fee revenue  
- **Purpose**: Calculate fees collected from option exercise and APY fee events
- **Logic**: Combine two event types: `Pool_Exercise_event` and `Pool_APYFeePaid_event`. For exercise events, extract fees from the `fee` field and decode `longTokenId` using the same bitwise logic as trading fees. For APY fee events, extract amounts from the `amount` field and decode `shortTokenId` where 5.0 indicates underlying token and 7.0 indicates base token. Join with market metadata to resolve token addresses and aggregate daily by the same dimensions as trading fees.
- **Key fields**: `fee` (exercise fee amount), `amount` (APY fee amount), `longTokenId` and `shortTokenId` (encoded token identifiers)

### Component C: Token incentive expenses
- **Purpose**: Calculate PREMIA token rewards distributed as trading incentives
- **Logic**: Extract token claim events from `PremiaMine_Claim_event` logs across all chains. Each event contains a `rewardAmount` field representing PREMIA tokens claimed by users as trading incentives. Aggregate these amounts daily by chain and convert to USD using end-of-day PREMIA token prices. These represent the protocol's expenses for incentivizing trading activity.
- **Key fields**: `rewardAmount` (PREMIA tokens claimed), `address` (user address claiming rewards)

### Final aggregation
- **Combining components**: Sum trading fee revenue and exercise fee revenue to get total revenue. Token incentive expenses represent total expenses. Both revenue and expense streams are aggregated daily and converted to USD using end-of-day price feeds.
- **Currency conversion**: All token amounts are converted to USD using end-of-day prices and corrected for token decimals before aggregation
- **Time aggregation**: All events are aggregated to daily boundaries using day-level timestamp truncation
- **Final calculation**: Earnings equals total daily revenue minus total daily expenses, with the result representing Premia's net daily income from options trading operations

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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