# Seamless Lending Fees Methodology

## 1. Overview

Fees measures the total economic value paid by users to interact with Seamless Lending. This metric captures the total cost of borrowing, which includes interest accrued on outstanding loans, premiums paid for flash loan execution, and penalties incurred during collateral liquidations. Collected fees are distributed between the protocol treasury and liquidity providers as compensation for supplying assets to the lending markets.

## 2. Data sources

- **Blockchain events**: `FlashLoan`, `LiquidationCall`, and `MintedToTreasury` events from `LendingPool` contracts, `ReserveFactorChanged` and `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts, and ERC-20 `Transfer` events, covering the Base blockchain
- **External data**: End-of-day price feeds for underlying assets and off-chain treasury accrual state data

## 3. Step-by-step calculation

### Component A: Borrower interest accrual

- **Purpose**: Calculate the total interest paid by borrowers on Seamless Lending.
- **Logic**: Protocol revenue from interest is determined by tracking the daily change in cumulative treasury accruals and minted interest shares. Total treasury accruals are extracted from protocol state data, while interest minting is identified via `MintedToTreasury` events from `LendingPool` contracts. The protocol revenue (representing the treasury's share) is then grossed up to represent total interest paid by borrowers by dividing the revenue amount by the applicable reserve factor. Reserve factors are maintained by parsing `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `amountMinted`, `reserve_factor`, `token_address`

### Component B: Flash loan premiums

- **Purpose**: Capture the fees paid by users for utilizing flash loan liquidity.
- **Logic**: Fee amounts are extracted from the `premium` field within `FlashLoan` events emitted by `LendingPool` contracts. These premiums represent the direct cost paid by the borrower for the atomic loan and are aggregated per asset.
- **Key fields**: `premium`, `asset`

### Component C: Liquidation fees

- **Purpose**: Determine the total penalties paid by borrowers during liquidation events.
- **Logic**: Liquidation events are identified using `LiquidationCall` events from `LendingPool` contracts. Associated ERC-20 `Transfer` events are filtered to identify collateral asset transfers from the liquidated user to the protocol treasury address. This transferred amount represents the protocol’s portion of the liquidation penalty. The total fee (the full penalty paid by the borrower) is calculated by dividing this protocol share by the liquidation protocol fee factor, which is tracked via `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `collateralAsset`, `amount`, `liquidation_factor`

### Component D: USD conversion and aggregation

- **Purpose**: Normalize fee values across different assets and timeframes.
- **Logic**: All collected fee components are aggregated by asset and day. Values are normalized by the decimal precision of each specific asset and multiplied by end-of-day price feeds to determine the USD value. Daily totals are calculated using UTC day boundaries.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

Lending

Seamless Lending

Fees

Fees

Chain breakdown