# Raydium CPMM Fees Methodology

## 1. Overview

Fees measures the total value paid by users to trade and create liquidity pools within Raydium CPMM. This metric captures the economic activity generated by the constant product market maker program on Solana. The total value is comprised of variable trading fees based on swap volume and fixed fees associated with program-level pool initialization.

## 2. Data sources

- **Blockchain events**: `Initialize`, `CreateAmmConfig`, and `UpdateAmmConfig` instructions from the `CPMM` program, and decentralized exchange swap instructions on Solana
- **External data**: End-of-day price feeds for SOL and various liquidity pool assets

## 3. Step-by-step calculation

### Component A: Fee rate configuration tracking

- **Purpose**: Identify the active fee percentages for different pool configurations
- **Logic**: Instruction data from `CreateAmmConfig` and `UpdateAmmConfig` instructions within the `CPMM` program is parsed to identify active trade fee rates, protocol fee rates, and fund fee rates. These rates are mapped to specific automated market maker (AMM) configurations and tracked over time to ensure the correct rate is applied based on the transaction timestamp and block slot.
- **Key fields**: `amm_config`, `trade_fee_rate`, `protocol_fee_rate`, `fund_fee_rate`

### Component B: Trading fee calculation

- **Purpose**: Calculate fees generated from swap activity
- **Logic**: Swap instructions associated with the `CPMM` program are extracted from Solana decentralized exchange activity. Base and quote asset amounts are normalized by decimal precision. Trading volume is determined by selecting the USD value of the stablecoin or SOL side of the pair; if neither asset is a stablecoin or SOL, the asset with the lower USD value is used to prevent double-counting. Fees are calculated by applying the specific trade fee rate (derived from Component A) to the identified trading volume.
- **Key fields**: `pool_address`, `base_amount`, `quote_amount`, `trade_fee_rate`

### Component C: Pool creation fee extraction

- **Purpose**: Capture flat fees paid during the initialization of new liquidity pools
- **Logic**: `Initialize` instructions from the `CPMM` program are parsed to identify the creation of new liquidity pools. A fixed fee of 0.15 SOL is attributed to each initialization instruction. This native asset amount is then converted to USD using end-of-day price feeds.
- **Key fields**: `pool_address`, `fee_amount`

### Component D: USD conversion and final aggregation

- **Purpose**: Normalize all fee components to USD and aggregate by time
- **Logic**: All fee components, including trading fees and pool creation fees, are aggregated by day. Amounts are normalized by decimal precision and multiplied by end-of-day price feeds to determine the final USD value. Data is aggregated using UTC day boundaries.
- **Key fields**: `block_timestamp`, `token_address`, `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

Exchanges (DEX)