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 Fees Methodology

## 1. Overview

Premia fees represent the total fees collected by the Premia protocol from options trading activities and related services. This metric captures fees from three main sources: trading fees charged on option purchases and sales, premiums collected from option trades, and fees from option exercises and APY-related services. The calculation aggregates fees across multiple chains (Arbitrum, Ethereum, Fantom, and Optimism) and converts all amounts to USD for standardized reporting.

## 2. Data sources

The calculation relies on several types of blockchain data from the Premia v1 protocol:
- **Trading events**: Parsed `Pool_Purchase_event` and `Pool_Sell_event` logs from Premia v1 smart contracts across Arbitrum, Ethereum, Fantom, and Optimism chains
- **Exercise events**: Parsed `Pool_Exercise_event` logs capturing option exercise transactions and associated fees
- **APY fee events**: Parsed `Pool_APYFeePaid_event` logs for yield-related fees charged by the protocol
- **Pool deployment data**: `ProxyManager_DeployPool_event` logs providing market configuration and token pair mappings
- **Token metadata**: Token dimension data providing symbols, decimals, and contract addresses for proper identification
- **Price data**: End-of-day token price feeds for USD conversion of fee amounts collected in various tokens

## 3. Step-by-step calculation

### Component A: Trading fees and premiums
- **Purpose**: Captures fees and premiums from option trading activities (purchases and sales)
- **Logic**: Extracts `Pool_Purchase_event` and `Pool_Sell_event` logs from Premia v1 contracts across four supported chains. For each trading event, decodes the `longTokenId` parameter using bitwise division by 2^248 to determine whether fees are collected in underlying tokens (when result equals 4.0) or base tokens (when result equals 6.0). Joins with pool deployment events to map pool addresses to their underlying and base token pairs, then with token metadata to retrieve symbols for option pair naming. Sums both the `feeCost` field (trading fees) and `baseCost` field (option premiums) for each trade
- **Key fields**: `feeCost` represents protocol trading fees, `baseCost` represents option premiums, `longTokenId` encodes token type information, `contractSize` provides volume data, and decoded token addresses determine the currency of fee collection

### Component B: Exercise and APY fees  
- **Purpose**: Captures fees from option exercises and APY-related services
- **Logic**: Processes two types of exercise-related events. For `Pool_Exercise_event` logs, extracts the `fee` field representing charges for exercising options and decodes `longTokenId` to determine fee token addresses. For `Pool_APYFeePaid_event` logs, extracts the `amount` field for APY-related fees and decodes `shortTokenId` using similar logic where division results of 5.0 indicate underlying tokens and 7.0 indicate base tokens. Joins with pool deployment and token metadata to identify token pairs and construct option descriptions
- **Key fields**: `fee` amounts from exercise events, `amount` values from APY fee events, `longTokenId` and `shortTokenId` for token type decoding, and pool addresses for market identification

### Final aggregation
- **Combining components**: Unions trading fees (sum of fee amounts and premium amounts) with exercise fees and APY fees, grouping by daily timestamp, chain, market sector (`derivatives`), business segment (`option`), and fee token address
- **Currency conversion**: Applies decimal corrections based on each token's decimal places, then converts all fee amounts to USD using end-of-day price feeds matched by date and token address  
- **Time aggregation**: Truncates all timestamps to daily boundaries and groups all fees by day to create consistent daily totals
- **Final calculation**: Sums all fee components (trading fees + premiums + exercise fees + APY fees) in USD terms, grouped by day, chain, and token, with zero-filling applied to ensure continuous daily reporting across all supported chains and tokens

*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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