# PrimeFi Lending Fees Methodology

## 1. Overview

Fees measures the total economic value paid by users of PrimeFi Lending to borrow assets or execute flash loans. This includes interest accrued on outstanding debt and premiums paid for flash loan access. These fees represent the total value generated by the lending markets before distribution to liquidity providers and the protocol treasury.

## 2. Data sources

- **Blockchain events**: `FlashLoan` events from `LendingPool` contracts, `ReserveFactorChanged` and `ReserveInitialized` events from `LendingPoolConfigurator` contracts, and ERC-20 `Transfer` events from `aToken` contracts, covering XDC
- **External data**: End-of-day price feeds for assets and metadata for asset decimal normalization

## 3. Step-by-step calculation

### Component A: Market and reserve factor configuration

- **Purpose**: Identify active lending markets and track the protocol's fee-sharing parameters
- **Logic**: Active markets are identified using `ReserveInitialized` events from `LendingPoolConfigurator` contracts. Reserve factors, which define the portion of interest redirected to the treasury, are tracked through `ReserveFactorChanged` events from the same contracts. A default reserve factor of 10% is applied to markets where an explicit factor has not been set by the configurator.
- **Key fields**: `token_address`, `reserve_factor`

### Component B: Interest fee gross-up calculation

- **Purpose**: Calculate total interest paid by borrowers based on treasury revenue transfers
- **Logic**: Protocol revenue is identified from ERC-20 `Transfer` events where `aTokens` are minted (transferred from the null address) directly to the designated treasury address. Total interest fees are then calculated by grossing up this revenue amount using the active reserve factor. Specifically, the supply-side portion is calculated as `(treasury_amount / reserve_factor) * (1 - reserve_factor)`, and total fees are determined by summing the treasury revenue and the calculated supply-side share.
- **Key fields**: `amount` (transferred value), `reserve_factor`

### Component C: Flash loan premium extraction

- **Purpose**: Capture fees paid for instantaneous asset borrowing
- **Logic**: Premiums paid by users are extracted from `FlashLoan` events emitted by `LendingPool` contracts. These amounts represent the direct fee paid by flash loan users and are aggregated as a component of the total fee metric.
- **Key fields**: `premium_amount`, `token_address`

### Component D: Normalization and USD conversion

- **Purpose**: Standardize fee values into a common currency for aggregation
- **Logic**: All collected amounts are normalized by their respective decimal precision. To ensure accurate valuation, specific asset mappings are applied, such as mapping `psXDC` to `WXDC` for price lookup. Final values are converted to USD using end-of-day price feeds and aggregated to a daily grain using UTC boundaries.
- **Key fields**: `token_address`, `fees`, `price_usd`

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

PrimeFi Lending

Fees

Fees

Chain breakdown