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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of fees that Ribbon Finance vault users receive, calculated as the difference between total vault yields and the protocol's fee share. This metric captures the economic value that flows to liquidity providers and yield seekers across Ribbon's various vault products including Theta vaults (options strategies), Earn vaults (lending), and Treasury vaults (treasury management). The calculation combines direct fee collections, estimated yields from performance fee data, and applies protocol-specific business logic to separate supply-side returns from protocol revenue.

## 2. Data sources

- **Ethereum contract events**: Parsed `CollectVaultFees`, `CollectPerformanceFee`, `CollectManagementFee`, and `Withdraw` events from Ribbon V1 and V2 vault contracts across different vault types
- **Avalanche contract events**: Parsed `CollectVaultFees` events from Ribbon V2 vault contracts  
- **Performance fee events**: Parsed `PerformanceFeeSet` events from vault contracts to track fee percentage changes over time
- **Token transfer events**: Ethereum `Transfer` events to identify actual tokens involved in Treasury vault fee collections
- **End-of-day price feeds**: Token price data for USD conversion of fee amounts
- **Token metadata**: Decimal precision information for proper token amount calculations
- **Vault configuration**: Hardcoded vault addresses, names, supported tokens, and business classifications

## 3. Step-by-step calculation

### Component A: Direct vault fee extraction
- **Purpose**: Captures direct fee collections from Theta and Earn vaults across Ethereum and Avalanche networks
- **Logic**: Processes `CollectVaultFees` events from vault contracts, extracting performance fees (specified in `performanceFee` parameter) and calculating management fees as the difference between total vault fees and performance fees. Joins with vault configuration data to add vault names and token addresses. Filters out specific transactions identified as part of an overcharge bug incident.
- **Key fields**: `performanceFee` (protocol's cut), `vaultFee` (total fees), calculated `mgmt_fee_amount`, vault `account_address`, `token_address`

### Component B: Treasury vault fee processing  
- **Purpose**: Handles Treasury vault fees which are collected through separate performance and management fee events
- **Logic**: Processes distinct `CollectPerformanceFee` and `CollectManagementFee` events from Treasury vault contracts. Joins with token transfer events to identify the actual token addresses involved in the fee transfers, using the fee recipient and vault addresses to match transfers with fee collection events.
- **Key fields**: `performanceFee` or `managementFee` amounts, `feeRecipient` address, matched `token_address` from transfers

### Component C: V1 withdrawal fee capture
- **Purpose**: Extracts withdrawal fees from legacy V1 Theta vaults
- **Logic**: Processes `Withdraw` events from V1 vault contracts, capturing the `fee` parameter as withdrawal fees charged to users exiting vault positions.
- **Key fields**: `fee` amount representing withdrawal charges, vault `account_address`

### Component D: Earn vault yield calculation
- **Purpose**: Estimates total yields generated by Earn vaults to calculate the supply-side portion
- **Logic**: Takes performance fees collected by specific Earn vaults and reverse-calculates total yields using hardcoded performance fee percentages. For the USDC Earn vault, multiplies performance fees by 100/15 (assuming 15% fee rate). For the stETH Earn vault, multiplies by 100/10 (assuming 10% fee rate). This represents the total yield before fee deduction.
- **Key fields**: `perf_fee_amount`, calculated total `amount` representing gross yields

### Component E: General vault yield estimation
- **Purpose**: Calculates yield portions for all vaults based on their performance fee cuts
- **Logic**: Divides performance fees by each vault's current performance fee percentage (tracked through `PerformanceFeeSet` events with fill-forward logic for missing days) to estimate total yields, then subtracts the original performance fee to get the yield portion. Uses a default 10% performance fee cut when no specific percentage is available. The result represents the estimated yield that would flow to vault participants.
- **Key fields**: `perf_fee_amount`, `new_performance_fee_cut` percentage, calculated yield `amount`

### Final aggregation
- **Combining components**: Unions all fee and yield components using different logic based on vault type. For Treasury vaults, supply-side fees are set to 0. For other vaults, supply-side fees equal withdrawal fees minus performance fees (representing the portion flowing to users). Earn vault yields and general vault yields are added as positive supply-side amounts.
- **Currency conversion**: Applies token address normalization (converting yvUSDC variant addresses to standard USDC address), corrects token decimals using metadata, and converts all amounts to USD using end-of-day price feeds
- **Time aggregation**: Truncates all timestamps to daily boundaries and applies fill-zero strategy for missing days
- **Final calculation**: The final supply-side fees metric represents the daily USD value of economic benefits flowing to Ribbon vault participants, calculated as total yields minus protocol fees across all vault types and networks

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

Portion of fees distributed to service providers or supply-side participants.

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Supply-side fees

Supply-side fees

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