Liquidity providers deposit funds into SolidLizard and stake their LP tokens to receive SLIZ tokens (token incentives).

SolidLizard is a non-custodial exchange protocol built on Arbitrum. SolidLizard was founded by an anonymous team and launched in 2023.

SLIZ tokenholders own and govern the protocol. They vote for pools where they wish to receive trading fees and external bribes from, while pools receive SLIZ emissions in respect to their share of votes.

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SolidLizard

# SolidLizard Earnings Methodology

## 1. Overview

SolidLizard earnings represents the net profitability of the protocol, calculated as the difference between revenue generated from trading fees and expenses from liquidity incentive distributions. This metric answers the business question: "How much net profit does the protocol generate after accounting for its costs to incentivize liquidity?" The calculation follows a straightforward approach: Earnings = Revenue - Expenses, where both components are measured in USD and aggregated daily.

## 2. Data sources

The calculation relies on several types of blockchain data and external feeds:

- **Blockchain events**: Parsed Arbitrum event logs including `Pair_Claim_event` (fee collections), `PairFactory_PairCreated_event` (trading pair creation), `Gauge_ClaimRewards_event` (incentive distributions), and `Voter_GaugeCreated_event` (gauge-to-pair mappings)
- **External data**: End-of-day token price feeds for USD conversion and token metadata containing decimal places and symbols
- **Protocol-specific data**: SLIZ token contract address (`0x463913d3a3d3d291667d53b8325c598eb88d3b0e`) for identifying incentive payments

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculate protocol revenue from trading fees that flow to the protocol rather than individual liquidity providers
- **Logic**: Extract fee claim events from trading pairs, specifically focusing on fees claimed by gauge addresses which represent protocol-controlled revenue streams. Join claim events with trading pair metadata to identify the two tokens involved in each pair. Convert raw token amounts to human-readable values by dividing by the appropriate decimal places for each token. Convert both token amounts to USD using end-of-day price feeds and sum them to get total fee value. Filter to include only fees claimed by addresses that are registered as gauges in the liquidity incentive system. Aggregate all fee collections by day to produce daily revenue totals.
- **Key fields**: `amount0` and `amount1` (raw token amounts from fee claims), `sender` (fee collector address), `token0_address` and `token1_address` (trading pair tokens), `fees` (USD value of combined token amounts)

### Component B: Expenses calculation  
- **Purpose**: Calculate protocol expenses from liquidity incentive distributions to users
- **Logic**: Extract liquidity incentive payment events from gauge contracts that distribute SLIZ tokens to liquidity providers. Map each gauge address to its corresponding trading pair using the voter contract events that establish these relationships. This allows attribution of incentive costs to specific trading pairs. Convert raw SLIZ token amounts to human-readable values using the token's decimal places. Convert token amounts to USD using end-of-day price feeds. Aggregate all incentive distributions by day to produce daily expense totals.
- **Key fields**: `amount` (raw SLIZ token amounts distributed), `gauge` (incentive distribution address), `pool` (associated trading pair address), `token_incentives` (USD value of incentive distributions)

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently and then combined using the earnings formula where daily expenses are subtracted from daily revenue
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds matched by timestamp, token address, and chain
- **Time aggregation**: All events are aggregated to daily boundaries using timestamp truncation to the day level
- **Final calculation**: Net earnings equals daily revenue from protocol-captured trading fees minus daily expenses from liquidity incentive distributions, with zero-filling applied for days with no activity to ensure complete time series data

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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