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Asset management

Seamless Protocol

# Seamless Protocol Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of fees earned by liquidity providers (suppliers) on Seamless Protocol, a lending platform on Base. This metric captures the revenue that suppliers receive for providing liquidity to the protocol's lending markets. The calculation combines three fee sources: interest earned on supplied assets, flash loan premiums, and liquidation fees. Each component uses protocol-specific fee-sharing mechanisms to determine the supplier's share versus the protocol's share.

## 2. Data sources

The calculation uses several types of blockchain and external data:

- **Base blockchain events**: Parsed `FlashLoan` events containing flash loan premiums, `LiquidationCall` events identifying liquidation transactions, and `MintedToTreasury` events tracking treasury mints
- **Base blockchain configuration events**: `ReserveFactorChanged` events that set the protocol's share of interest revenue, and `LiquidationProtocolFeeChanged` events that configure liquidation fee splits
- **Base blockchain token transfers**: Parsed `Transfer` events for aTokens to track fee flows during liquidations
- **Seamless Protocol treasury accrual data**: External state data tracking cumulative interest accruals to the protocol treasury
- **Token metadata**: Token contract information including decimal precision for accurate calculations
- **End-of-day price feeds**: Token price data for USD conversion of all fee amounts

## 3. Step-by-step calculation

### Component A: Interest fees from lending operations
- **Purpose**: Calculate the supply-side portion of interest revenue generated by lending activities
- **Logic**: The calculation starts with external treasury accrual data that tracks cumulative interest earned by the protocol treasury. Daily interest amounts are calculated by taking the difference between consecutive daily cumulative totals, accounting for any treasury mint events. The supply-side share is determined using each token's reserve factor, which represents the protocol's share of interest revenue. The formula applies: daily_revenue divided by reserve_factor, then multiplied by (1 minus reserve_factor), giving suppliers the remaining portion after the protocol takes its share
- **Key fields**: `treasury_accruals` (cumulative interest earned), `treasury_mints` (direct treasury allocations), `reserve_factor` (protocol's share percentage), `daily_revenue` (calculated daily interest amount)

### Component B: Flash loan fees
- **Purpose**: Calculate the supply-side portion of flash loan premiums
- **Logic**: Flash loan fees are extracted directly from `FlashLoan` events on Base blockchain, specifically from the `premium` field. Seamless Protocol allocates 99.96% of flash loan premiums to liquidity suppliers, with only 0.04% retained by the protocol. The calculation applies this split by subtracting the protocol's 0.04% share from the total premium amount
- **Key fields**: `premium` (flash loan fee amount), with hardcoded split factor of 0.0004 representing protocol share

### Component C: Liquidation fees
- **Purpose**: Calculate the supply-side portion of fees generated during liquidation events
- **Logic**: Liquidation fees are identified by matching `LiquidationCall` events with corresponding aToken transfers from liquidated users to the protocol treasury. The transfers represent collateral seized during liquidations. Each token has a configurable liquidation protocol fee factor that determines the split between protocol and suppliers. The supply-side amount is calculated using: transfer_amount divided by liquidation_factor, then multiplied by (1 minus liquidation_factor)
- **Key fields**: `collateral_token_address` (token being liquidated), `liquidation_factor` (protocol's share of liquidation fees), transfer `amount` (collateral seized)

### Final aggregation
- **Combining components**: All three fee components are combined using UNION ALL operations, with each maintaining consistent field structure including timestamp, chain, token address, and business classification fields
- **Currency conversion**: Each component's fees are converted to USD using end-of-day token prices, with decimal adjustments applied based on each token's precision standard
- **Time aggregation**: All fees are aggregated to daily boundaries using timestamp truncation, ensuring consistent time-series reporting
- **Final calculation**: The final supply-side fees represent the sum of interest fees (after reserve factor split), flash loan fees (after protocol share deduction), and liquidation fees (after liquidation factor split), all converted to USD and aggregated daily

*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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