Liquidity providers deposit funds into Ribbon Protocol and receive option premiums from traders & withdrawal fees from other liquidity providers (supply-side fees).

Ribbon Finance is a non-custodial asset management protocol built on Ethereum. Ribbon Finance was founded by Julian Koh & Ken Chan and launched in 2021.

RBN tokenholders own and govern the protocol. They currently take a cut of the total premiums and management fees paid by liquidity providers (revenue).

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Ribbon Finance

# Ribbon Finance Average fees per user (AFPU) Methodology

## 1. Overview

Average fees per user (AFPU) measures the daily fee revenue generated per active user on Ribbon Finance's decentralized asset management platform. This metric is calculated by dividing the total daily fees collected across all Ribbon vaults by the number of unique daily active users who interacted with the platform. AFPU provides insight into the monetization efficiency of Ribbon's yield farming and options strategies, helping assess user value and platform economics.

## 2. Data sources

The AFPU calculation relies on several blockchain and external data sources:

- **Ethereum smart contract events**: Parsed events from Ribbon v1 and v2 vault contracts including `Deposit`, `Withdraw`, `InstantWithdraw`, `CollectVaultFees`, `CollectPerformanceFee`, and `CollectManagementFee` events
- **Avalanche smart contract events**: Parsed events from Ribbon v2 vault contracts for cross-chain vault operations
- **Ethereum token transfer events**: `Transfer` events used to capture treasury vault fee flows between vault addresses and fee recipients
- **End-of-day token price feeds**: Daily closing prices for USD conversion of fee amounts across different tokens
- **Token metadata**: Decimal precision data for proper token amount normalization
- **Vault configuration data**: Static vault address mappings, token associations, and performance fee parameters

## 3. Step-by-step calculation

### Component A: User activity tracking
- **Purpose**: Identifies and counts unique daily active users across Ribbon's vault ecosystem
- **Logic**: Extracts user addresses from vault interaction events including deposits, withdrawals, and instant withdrawals across Ethereum and Avalanche chains. Events are sourced from ThetaVault, EarnVault, and TreasuryVault contracts for both v1 and v2 versions. Users are classified as either depositors or withdrawers based on their transaction type. Timestamps are truncated to daily boundaries and users are aggregated using HyperLogLog functions to enable efficient unique counting across multiple dimensions
- **Key fields**: `user_address` from event parameters, `block_timestamp` truncated to day, `chain` identifier, `user_type` classification

### Component B: Fee collection aggregation
- **Purpose**: Captures all fee revenue generated by Ribbon vaults across different fee types and vault versions
- **Logic**: Collects three main categories of fees: standard vault fees from `CollectVaultFees` events containing both performance and management fee components, treasury vault fees from separate `CollectPerformanceFee` and `CollectManagementFee` events joined with token transfer data to identify fee amounts, and v1 withdrawal fees from legacy `ThetaVault_Withdraw` events. Known overcharge bug transactions are excluded through dimensional filtering. Token addresses are normalized to map yvUSDC variants to standard USDC addresses
- **Key fields**: `performanceFee`, `vaultFee`, `managementFee`, and `fee` amounts from various event parameters, `token_address` for fee denomination, `account_address` for vault identification

### Component C: Yield calculation for EarnVaults
- **Purpose**: Calculates total yield amounts from EarnVault performance fees using protocol-specific fee percentages
- **Logic**: Takes performance fees collected from EarnVaults and reverse-calculates total yield by dividing by the vault's fee percentage. Uses hardcoded fee percentages of fifteen percent for USDC earn vaults and ten percent for stETH earn vaults, representing the protocol's cut of generated yield
- **Key fields**: `perf_fee_amount` from fee collection events, `account_address` to identify specific earn vaults

### Component D: Vault yield calculation
- **Purpose**: Determines total vault yields by accounting for performance fee cuts across all vault types
- **Logic**: Calculates total yield generated by dividing collected performance fees by the vault's performance fee cut percentage. Performance fee cuts are sourced from `PerformanceFeeSet` events with forward-filling for missing days. When no performance fee cut is available, defaults to ten percent. The calculation subtracts the original performance fee amount to isolate the yield portion that was retained by users
- **Key fields**: `perf_fee_amount` from fee collection, `new_performance_fee_cut` from performance fee events, `vault_account_address` for joining fee and yield data

### Final aggregation
- **Combining components**: All fee components (standard vault fees, treasury fees, earn vault yields, and calculated vault yields) are combined into a single daily fee total per vault, with token address normalization applied consistently across all sources
- **Currency conversion**: Fee amounts are converted to USD using end-of-day price feeds through the `convert_to_usd_and_correct_decimals` macro, which also corrects for token decimal precision to ensure proper amount scaling
- **Time aggregation**: All timestamps are truncated to daily boundaries with fees summed by day, chain, and vault dimensions. Missing days are filled with zero values to maintain complete time series
- **Final calculation**: Daily total fees in USD are divided by the count of unique daily active users (calculated via HyperLogLog extraction) to produce the average fees per user metric. The division is performed through the `calculate_arpu` macro which handles the mathematical operation and applies appropriate rounding

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

Ribbon FinanceRBN

Average fees per user (AFPU)

Average fees per user (AFPU)

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