# XRPL AMM Revenue Methodology

## 1. Overview

Revenue measures the portion of trading fees retained by the XRP Ledger protocol from XRPL AMM swaps. Trading fees on XRPL AMM pools are collected when users swap assets through automated market maker pools, with a configurable fee rate set per pool. The protocol retains 100% of these trading fees as all base layer transaction fees are burned rather than accruing to the protocol. Revenue is denominated in USD.

## 2. Data sources

- **Blockchain data**: Reserve state changes from XRPL AMM pools tracked through affected nodes in ledger transactions of type `Payment` and `OfferCreate`, covering XRP Ledger
- **Pool configuration**: Trading fee rates extracted from `AMMCreate` and `AMMVote` transactions with ledger entry type `XRPL AMM`
- **External data**: End-of-day price feeds for assets traded in XRPL AMM pools

## 3. Step-by-step calculation

### Component A: Swap volume inference from reserve deltas

- **Purpose**: Calculate trading volumes by tracking how XRPL AMM pool reserves change between consecutive swaps
- **Logic**: Parse affected nodes with ledger entry type `XRPL AMM` from `Payment` and `OfferCreate` transactions. For each pool, compute the absolute difference between consecutive reserve states, using lag windowing to exclude liquidity provision operations. Both reserves must change for a valid swap. Pools exhibiting extreme price-reserve imbalances (ratios exceeding 5000x or completely one-sided pricing) are excluded through a denylist.
- **Key fields**: `reserve_0` and `reserve_1` representing pool balances for each asset pair

### Component B: Fee rate extraction

- **Purpose**: Determine the protocol fee charged per pool at each point in time
- **Logic**: Extract the `TradingFee` field from affected nodes in `AMMCreate` and `AMMVote` transactions with ledger entry type `XRPL AMM`. Fee rates are stored per pool with validity windows, where each fee remains active from its vote timestamp until the next vote. For each swap, join to the most recent fee rate active at the swap timestamp.
- **Key fields**: `TradingFee` representing the fee rate in units of 1/100,000 (value 1000 equals 1%)

### Component C: USD conversion and revenue calculation

- **Purpose**: Convert swap volumes to USD and apply fee rates to derive protocol revenue
- **Logic**: For each swap, take the minimum USD value between the two reserve deltas to establish volume (representing the smaller side of the trade). Multiply volume by the fee rate divided by 100,000 to calculate fees in USD. Aggregate by day. Since base layer transaction fees are burned rather than retained, and XRPL AMM trading fees accrue entirely to the protocol with no supply-side distribution, revenue equals total XRPL AMM fees.

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

Revenue

Exchanges (DEX)

Through the use of blockchain and modern APIs, Ripple enables financial institutions who are part of the network, RippleNet, to send money globally, instantly, reliably and for fractions of a penny. RippleNet is built on top of Ripple’s consensus ledger, XRP Ledger (XRPL).

Ripple is the leading provider of crypto-enabled solutions for businesses. Ripple was founded by Chris Larsen and Jed McCaleb and launched in 2012 (previously OpenCoin).

XRP tokenholders own and govern Ripple's consensus ledger 'XRP Ledger' (XRPL). Ripple's investors include a16z, Pantera Capital, Route 66 Ventures, etc.