# Seamless Lending Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the share of total interest and premiums paid by users that is distributed to liquidity providers within Seamless Lending. This metric represents the primary incentive for users to supply assets to the protocol's lending markets. The value is comprised of the suppliers' portion of borrower interest, flash loan premiums, and liquidation penalties, excluding the protocol's retained share.

## 2. Data sources

- **Blockchain events**: `FlashLoan`, `LiquidationCall`, and `MintedToTreasury` events from `LendingPool` contracts, `ReserveFactorChanged`, `LiquidationProtocolFeeChanged`, and `ReserveInitialized` events from `LendingPoolConfigurator` contracts, and ERC-20 `Transfer` events, covering Base.
- **External data**: End-of-day price feeds for supported assets.

## 3. Step-by-step calculation

### Component A: Borrow interest allocation

- **Purpose**: Captures the portion of interest paid by borrowers that is distributed to liquidity providers.
- **Logic**: Cumulative protocol interest is determined by combining historical treasury accrual state data with `MintedToTreasury` events from `LendingPool` contracts. Daily protocol revenue is identified by calculating the daily change in these cumulative interest amounts. Supply-side fees are then back-calculated by dividing the protocol revenue by the market-specific reserve factor and multiplying by the liquidity provider's share (one minus the reserve factor). Reserve factors are sourced from `ReserveFactorChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `in_amountMinted`, `in_newReserveFactor`, `treasury_accruals`.

### Component B: Flash loan premium split

- **Purpose**: Captures the share of flash loan premiums distributed to liquidity providers.
- **Logic**: `FlashLoan` events are parsed from `LendingPool` contracts to extract the premium amount paid for each loan. A fixed protocol fee split of 0.04% is applied to the premium to determine the protocol's take. The remaining 99.96% of the premium is allocated to the supply side.
- **Key fields**: `in_premium`, `in_asset`.

### Component C: Liquidation penalty distribution

- **Purpose**: Captures the share of liquidation penalties allocated to liquidity providers.
- **Logic**: `LiquidationCall` events from `LendingPool` contracts are monitored to identify liquidation transactions. ERC-20 `Transfer` events are filtered to identify transfers of atokens from the liquidated user's address to the protocol treasury. The total supply-side share is calculated by dividing the transferred amount by the liquidation protocol fee factor and multiplying by the supplier's portion (one minus the liquidation protocol fee factor). These factors are updated via `LiquidationProtocolFeeChanged` events from `LendingPoolConfigurator` contracts.
- **Key fields**: `in_collateralAsset`, `in_user`, `in_newFee`, `value`.

### Component D: USD conversion and aggregation

- **Purpose**: Normalizes all fee components into USD for cross-asset comparison and reporting.
- **Logic**: All collected amounts are normalized by asset-specific decimal precision. These quantities are multiplied by end-of-day price feeds to determine the USD value. Data is aggregated by day using UTC boundaries.
- **Key fields**: `block_timestamp`, `token_address`, `price_usd`.

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

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

Supply-side fees

Lending

Seamless Lending

Supply-side fees

Supply-side fees

Chain breakdown