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Prime Numbers

# Prime Numbers Earnings Methodology

## 1. Overview

Earnings represents the net profitability of the Primenumbers (PrimeFi Lending) lending protocol, calculated as total revenue minus total expenses. This metric answers the fundamental business question of whether the protocol is generating positive cash flow. The calculation follows a simple formula: daily protocol revenue from interest fees minus daily token incentive expenses paid to users.

## 2. Data sources

The earnings calculation relies on several XDC blockchain data sources and external feeds:

- **XDC blockchain event logs**: Parsed `LendingPoolConfigurator_ReserveFactorChanged_event` and `LendingPoolConfigurator_ReserveInitialized_event` logs that track lending market configurations and fee parameters
- **XDC token transfer events**: Token transfer records filtered by recipient address to identify protocol fee collections, specifically aToken mints to treasury addresses
- **Reward payment events**: Parsed `MultiFeeDistribution_Withdrawn_event` logs for lending incentives and `PrimeStakedXDC_RewardPaid_event` logs for staking rewards
- **End-of-day price feeds**: Token price data for USD conversion, including special mapping for psXDC tokens
- **Token metadata**: Decimal precision data for proper amount normalization

## 3. Step-by-step calculation

### Component A: Revenue from protocol fees

- **Purpose**: Calculate daily revenue generated from lending protocol fees using the AAVE v2 pattern
- **Logic**: Revenue is derived from aToken mints to treasury addresses, which represent the protocol's share of interest generated. The system identifies token transfers where the `from_address` is the null address (indicating a mint) and the `to_address` matches known treasury addresses. Reserve factors are tracked daily from configuration events, with a default value of 10% applied when no specific factor is set. The reserve factor determines what portion of total interest goes to the protocol treasury versus depositors. Total interest is calculated by dividing fee transfers by the reserve factor, and protocol revenue is the fee transfer amount itself.
- **Key fields**: `block_timestamp` for daily aggregation, `transaction_hash` and `log_index` for event identification, `token_address` for the underlying asset, `value` for transfer amounts, `to_address` for treasury identification, `reserve_factor` for fee split calculations

### Component B: Token incentive expenses

- **Purpose**: Calculate daily expenses from token incentives paid to users across both lending and staking products
- **Logic**: Expenses come from two sources of reward payments. First, lending incentives are captured from `MultiFeeDistribution_Withdrawn_event` logs which record when users claim earned tokens. Second, staking rewards are captured from `PrimeStakedXDC_RewardPaid_event` logs which record reward distributions to stakers. Both event types provide the `amount` field representing tokens paid out. These amounts are aggregated daily by product and converted to USD.
- **Key fields**: `block_timestamp` for daily aggregation, `receivedAmount` from lending rewards, `reward` from staking rewards, `token_address` for incentive token identification, `product_id` for categorization

### Component C: Price conversion and aggregation

- **Purpose**: Convert all monetary amounts to USD and prepare data for final calculation
- **Logic**: Token amounts are first corrected for decimal precision using token metadata. Special price mapping applies where psXDC tokens use WXDC prices for conversion. End-of-day price feeds provide USD conversion rates. All data is aggregated to daily granularity with zero-filling for missing days to ensure continuous time series.
- **Key fields**: `timestamp` for daily boundaries, `chain_id` for blockchain identification, `product_id` for protocol categorization

### Final aggregation

- **Combining components**: Revenue and expenses are calculated separately then combined using the `calculate_earnings` macro which performs a simple subtraction operation
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds with decimal correction applied before conversion
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with forward-fill logic applied to ensure continuous time series
- **Final calculation**: Daily earnings equals daily revenue minus daily expenses, with both components measured in USD

*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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