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Reserve

# Reserve Earnings Methodology

## 1. Overview

The Reserve earnings metric represents the daily net profit of the Reserve Protocol, calculated by subtracting total expenses from total revenue. This metric answers how much profit the Reserve Protocol generates across its index and yield products after accounting for token incentive expenses. The calculation combines fee revenue from Reserve's index products (folios/DTF) and yield products (RTokens) minus treasury withdrawals used for token incentives.

## 2. Data sources

The calculation relies on several types of blockchain and external data:

- **Smart contract events**: Parsed Reserve protocol events including `RTokenFactory_RTokenCreated` events for market creation, `DTF_FeeRecipientsSet` for fee recipient configuration, `DTF_MintFeeSet` and `DTF_TVLFeeSet` for fee rate settings, `RSR_TradeSettled` events for yield revenue tracking, and `RTokenMain_RSRTraderSet` events for trader address mapping
- **Token transfer events**: Parsed `Transfer` events from Ethereum, Base, and Arbitrum tracking token movements into and out of Reserve index tokens and from the treasury wallet  
- **End-of-day price feeds**: Token price data for USD conversion of all revenue and expense components
- **Token metadata**: Decimal precision information for proper token amount normalization

## 3. Step-by-step calculation

### Component A: Index product revenue
- **Purpose**: Calculates revenue from Reserve index products (folios/DTF) through TVL-based fees and mint fees
- **Logic**: Tracks token transfers to and from index token addresses to build daily balance positions. For TVL fees, multiplies end-of-day balances by the TVL fee rate per second and seconds per day. For mint fees, multiplies inflow amounts by the mint fee percentage. Applies platform fee splits where a portion goes to staked token holders (supply-side) and remainder becomes protocol revenue. Converts all token amounts to USD using end-of-day prices and aggregates across all index tokens
- **Key fields**: `amount` for token transfer values, `tvl_fee_per_second` and `tvl_fee_per_year` for TVL-based fees, `mint_fee` for mint fee percentages, `platform_fee_rate` for revenue splits

### Component B: Yield product revenue  
- **Purpose**: Captures revenue from Reserve yield products (RTokens) through RSR token buyback mechanisms
- **Logic**: Identifies RSR trader contract addresses from `RSRTraderSet` events and matches them to yield markets. Tracks `TradeSettled` events from these trader contracts where RSR tokens are purchased. Sums the buyback amounts daily and converts to USD using end-of-day RSR prices
- **Key fields**: `buyAmount` from trade settlement events, `rsr_trader_address` for identifying relevant contracts, `product_id` for categorizing as yield revenue

### Component C: Treasury expenses
- **Purpose**: Tracks all expenses as token withdrawals from Reserve's treasury wallet
- **Logic**: Monitors all token transfer events originating from Reserve's cold wallet address. These withdrawals represent token incentive distributions and other protocol expenses. Converts token amounts to USD using end-of-day prices and aggregates daily across all tokens
- **Key fields**: `from_address` filtered to treasury wallet, `value` for withdrawal amounts, `token_address` for identifying withdrawn tokens

### Final aggregation
- **Combining components**: Revenue components (index fees and yield revenue) are summed daily across all chains and products. Treasury expenses are similarly aggregated daily across all token types
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds, with proper decimal adjustment based on token metadata
- **Time aggregation**: Data is aggregated to daily grain using timestamp truncation, with transactions grouped by day boundaries
- **Final calculation**: Daily earnings equals total daily revenue minus total daily expenses, calculated using the `calculate_earnings` macro which performs the subtraction across corresponding revenue and expense records

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

ReserveRSR

Earnings

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