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 Earnings Methodology

## 1. Overview

Ribbon earnings represents the protocol's net profitability, calculated as total revenue minus total expenses on a daily basis. This metric measures Ribbon's financial performance from its yield farming vault operations across Ethereum and Avalanche, where revenue comes from performance and management fees charged to vault users, while expenses consist primarily of RBN token incentives distributed to users and liquidity providers.

## 2. Data sources

The calculation relies on several types of blockchain data and external feeds:
- **Fee collection events**: Parsed `CollectVaultFees`, `CollectPerformanceFee`, and `CollectManagementFee` events from Ribbon's ThetaVault, EarnVault, and TreasuryVault contracts on Ethereum and Avalanche
- **Token incentive events**: Parsed `Minted` events from Ribbon's Minter contract and `RewardWithdrawn` events from Pool contracts on Ethereum
- **Token transfer logs**: Ethereum token transfer events for RBN token distributions and fee transfers to validate actual amounts moved
- **Vault metadata**: Hardcoded configuration mapping vault contract addresses to vault names, token addresses, chains, and versions
- **Transaction exclusions**: Hardcoded list of transaction hashes involved in an overcharge bug that are filtered out
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal correction

## 3. Step-by-step calculation

### Component A: Revenue collection
- **Purpose**: Calculate total revenue from Ribbon's vault management fees
- **Logic**: Extract fee collection events from ThetaVault, EarnVault, and TreasuryVault contracts across Ethereum and Avalanche. For ThetaVault and EarnVault, performance fees are captured from the `performanceFee` field while management fees are calculated as total `vaultFee` minus `performanceFee`. For TreasuryVault, performance and management fees are captured from separate events and linked via token transfers to fee recipients. All fee events are enriched with vault metadata including vault names and underlying token addresses. Transactions involved in the overcharge bug are excluded using a hardcoded filter list. Only v2 and later vault versions are included, filtering out v1 vault fees.
- **Key fields**: `performanceFee`, `vaultFee`, `managementFee` amounts, vault `address`, `transaction_hash`, and `block_timestamp`

### Component B: Expenses collection
- **Purpose**: Calculate total expenses from RBN token incentive distributions
- **Logic**: Extract token incentive events from two sources on Ethereum. First, `Minted` events from the Minter contract where RBN tokens are minted and distributed to recipients. Second, `RewardWithdrawn` events from Pool contracts where users withdraw staking rewards. Both event types are matched with corresponding token transfer events to validate the actual RBN token amounts transferred. The transfers must involve the RBN token address and match the transaction hash of the original event. All incentive amounts are treated as protocol expenses since they represent costs of user acquisition and retention.
- **Key fields**: `recipient` or `account` addresses for incentive recipients, token transfer `value` amounts, and event `transaction_hash`

### Component C: Currency conversion and aggregation
- **Purpose**: Standardize all amounts to USD and aggregate by time period
- **Logic**: Apply decimal correction to all token amounts based on each token's decimal places from token metadata. Convert corrected amounts to USD using end-of-day price feeds matched by token address and date. For revenue, sum all performance fees and management fees by day. For expenses, sum all RBN token incentive amounts by day. Handle missing price data by carrying forward the last available price.
- **Key fields**: Corrected token `amount`, USD `price`, and daily `timestamp`

### Final aggregation
- **Combining components**: Join daily revenue and daily expenses by date, filling with zeros for days without activity in either component
- **Currency conversion**: All amounts converted to USD using end-of-day price feeds with decimal correction applied first
- **Time aggregation**: Data aggregated to daily boundaries using timestamp truncation, with a zero-filling strategy for missing days
- **Final calculation**: Earnings equals daily revenue minus daily expenses, expressed in USD. The result shows Ribbon's daily net profitability from vault operations after accounting for token incentive costs.

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

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

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