# PrimeFi Lending Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the share of interest payments generated by borrowing activity that is distributed to lenders (liquidity providers) within PrimeFi Lending. This metric represents the total yield earned by users providing assets to the protocol's lending pools. Within the PrimeFi Lending architecture, interest paid by borrowers is split between the protocol treasury and the supply-side participants based on a configurable reserve factor.

## 2. Data sources

- **Blockchain events**: `ReserveInitialized` and `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts, and ERC-20 `Transfer` events for interest-bearing assets (aTokens), covering the XDC network
- **External data**: End-of-day price feeds for underlying assets and asset metadata

## 3. Step-by-step calculation

### Component A: Market and reserve configuration tracking

- **Purpose**: Identify active lending markets and their associated interest-bearing assets
- **Logic**: Lending markets are identified by parsing `ReserveInitialized` events from `LendingPoolConfigurator` contracts. This process maps underlying assets to their corresponding interest-bearing tokens (aTokens), variable debt tokens (vTokens), and stable debt tokens. This mapping ensures that fee activity for every supported asset is correctly attributed to the specific market.
- **Key fields**: `underlying_token_address`, `atoken_address`, `vtoken_address`

### Component B: Reserve factor monitoring

- **Purpose**: Determine the percentage split of interest between the protocol and lenders
- **Logic**: The reserve factor for each asset is extracted from `ReserveFactorChanged` events emitted by `LendingPoolConfigurator` contracts. Values are normalized by a decimal precision of 10,000. In instances where no event-based factor is found, a default reserve factor of 10% is applied. These factors are maintained as a daily time series for each asset to account for governance-led adjustments over time.
- **Key fields**: `in_factor`, `token_address`

### Component C: Protocol revenue extraction

- **Purpose**: Capture the protocol's share of interest to use as a basis for supply-side calculations
- **Logic**: Protocol revenue is identified by monitoring ERC-20 `Transfer` events where the recipient is the designated protocol treasury and the sender is the null address. These "mint" events represent the accrual of interest-bearing aTokens to the treasury. Only transfers involving aTokens identified in Component A are included.
- **Key fields**: `value`, `to_address` (treasury), `token_address` (aToken)

### Component D: Supply-side fee derivation

- **Purpose**: Calculate the lenders' share of interest based on the protocol's take
- **Logic**: Supply-side fees are derived using the protocol revenue and the applicable reserve factor. The calculation is performed by dividing the protocol revenue (treasury mints) by the reserve factor to determine total interest, then multiplying by the remainder (1 minus the reserve factor). If a reserve factor is set to zero, supply-side fees are also set to zero for that period.
- **Key fields**: `amount` (protocol revenue), `reserve_factor`

### Component E: USD conversion and aggregation

- **Purpose**: Normalize fee values into a common currency for reporting
- **Logic**: Asset amounts are normalized by their respective decimal precision. Values are then converted to USD using end-of-day price feeds for the underlying assets. For specific assets like native gas asset wrappers, price mapping is applied to ensure accurate valuation. Final values are aggregated by day and chain.
- **Key fields**: `timestamp`, `token_address`, `price_usd`

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

Portion of fees distributed to service providers or supply-side participants.

Supply-side fees

PrimeFi Lending

Supply-side fees

Supply-side fees

Chain breakdown