# Raydium CLMM Supply-side fees Methodology

## 1. Overview

Supply-side fees for Raydium CLMM are defined as the portion of total swap fees that is distributed to liquidity providers. These fees are earned by service providers as compensation for providing liquidity within concentrated liquidity ranges and are collected across all active trading pairs. The metric is calculated by subtracting the protocol-retained revenue and fund allocations from the gross trading fees generated by swap activity. All values are normalized by asset-specific decimal precision and converted to USD using end-of-day price feeds.

## 2. Data sources

- **Blockchain events**: `CreateAmmConfig`, `UpdateAmmConfig`, `CreatePool`, and trade-related instructions from Raydium CLMM programs, covering Solana
- **External data**: End-of-day price feeds for assets traded within the pools

## 3. Step-by-step calculation

### Component A: Trading volume tracking

- **Purpose**: Calculate the gross value of swap activity as the basis for fee generation
- **Logic**: Trade activity is identified from Solana DEX program instructions associated with the Raydium CLMM program. For each swap, the base and quote asset amounts are extracted and normalized by their respective decimal precisions. Trading volume is determined by selecting the USD value of the stablecoin or native SOL side of the trade; if neither asset is a stablecoin or SOL, the lesser USD value of the two trade sides is used.
- **Key fields**: `base_amount`, `quote_amount`, `base_mint`, `quote_mint`

### Component B: Fee rate configuration

- **Purpose**: Determine the specific fee percentages applied to each liquidity pool
- **Logic**: Fee parameters are parsed from `CreateAmmConfig` and `UpdateAmmConfig` instructions from the Raydium CLMM program. Each configuration is mapped to specific liquidity pools using `CreatePool` instructions. Three distinct rates are tracked over time: the trade fee rate (total fee paid by the user), the protocol fee rate (the protocol's share of the trade fee), and the fund fee rate (the share allocated to the ecosystem fund). These rates are normalized by a factor of one million to convert integer values into percentages.
- **Key fields**: `trade_fee_rate`, `protocol_fee_rate`, `fund_fee_rate`, `amm_config`

### Component C: Supply-side fee derivation

- **Purpose**: Isolate the portion of fees retained by liquidity providers
- **Logic**: Total fees are calculated by multiplying the trading volume by the trade fee rate associated with the pool at the time of the transaction. Protocol revenue is determined by applying the sum of the protocol and fund fee rates to the total fees. Supply-side fees are then derived by subtracting the protocol revenue from the total fees. The resulting values are aggregated by day and chain, and converted to USD using end-of-day price feeds for the respective assets.
- **Key fields**: `fees`, `revenue`, `fees_supply_side`

*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

Exchanges (DEX)