Overcollateralized borrowers deposit funds into Synthetix and mint synthetic assets.

Synthetix is a non-custodial derivatives exchange protocol built on Ethereum. Synthetix was founded by Kain Warwick and launched in 2017.

SNX tokenholders own and govern the protocol. They currently take all of the total trading fees paid by traders (revenue). Synthetix's investors include Paradigm, Framework Ventures, Coinbase Ventures, etc.

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Synthetix

# Synthetix Earnings Methodology

## 1. Overview

Synthetix earnings represent the protocol's net profit calculated as total revenue minus total expenses. Revenue comes from exchange fees collected when users trade synthetic assets (synths), while expenses consist of SNX token incentives paid to stakers and liquidity providers. This metric measures the protocol's profitability and sustainability by tracking the difference between fee income and token reward costs.

## 2. Data sources

- **Ethereum and Optimism token transfer events**: sUSD transfers to the designated fee collector address representing exchange fees collected from synthetic asset trading
- **Synthetix FeePool contract events**: `FeesClaimed` events on Ethereum and Optimism that distribute SNX rewards to stakers from the fee pool
- **Synthetix staking reward contract events**: `RewardPaid` events from 21 different reward contracts across Ethereum and Optimism, including various LP staking pools, shorting rewards, and dual rewards programs
- **End-of-day token price feeds**: USD price data for sUSD and SNX tokens to enable currency conversion and aggregation
- **Token metadata**: Decimal precision information for proper amount calculations

## 3. Step-by-step calculation

### Component A: Fee collection (revenue)
- **Purpose**: Captures total exchange fees collected from synthetic asset trading
- **Logic**: Identifies sUSD token transfers directed to the fee collector address `0xfeefeefeefeefeefeefeefeefeefeefeefeefeef` on both Ethereum and Optimism chains. Uses specific sUSD token addresses for each chain (Ethereum: `0x57ab1ec28d129707052df4df418d58a2d46d5f51`, Optimism: `0x8c6f28f2f1a3c87f0f938b96d27520d9751ec8d9`). Data is aggregated daily and converted to USD using end-of-day price feeds
- **Key fields**: `value` (transfer amount), `to_address` (fee collector), `token_address` (sUSD contract), `block_timestamp` (transaction timing)

### Component B: Staking rewards distribution
- **Purpose**: Tracks SNX token rewards paid to stakers through various reward programs
- **Logic**: Collects `RewardPaid` events from 21 different staking reward contracts across Ethereum and Optimism. Includes rewards for LP staking (Balancer, Curve, Uniswap pools), shorting rewards (sBTC, sETH), and synthetic asset staking rewards. All contracts use the same SNX token address per chain for reward payments
- **Key fields**: `reward` (SNX amount), `address` (recipient), `block_timestamp` (distribution timing)

### Component C: Fee pool rewards
- **Purpose**: Captures SNX rewards distributed from the protocol's fee pool to stakers
- **Logic**: Processes `FeesClaimed` events from Synthetix FeePool contracts on Ethereum and Optimism. These events represent SNX rewards distributed to stakers based on their staking participation and debt pool contribution
- **Key fields**: `snxRewards` (SNX reward amount), `address` (claiming staker), `block_timestamp` (claim timing)

### Component D: Token incentives aggregation (expenses)
- **Purpose**: Combines all SNX token distributions into total protocol expenses  
- **Logic**: Unions staking rewards and fee pool rewards data, aggregates by day, and converts SNX amounts to USD. Applies decimal corrections based on token metadata and uses end-of-day price feeds for USD conversion
- **Key fields**: Combined `amount` values from both reward sources, `token_address` (SNX contract), daily `timestamp`

### Final aggregation
- **Combining components**: Revenue uses aggregated sUSD fees converted to USD, while expenses use combined SNX incentives converted to USD
- **Currency conversion**: All amounts converted to USD using end-of-day price feeds with proper decimal adjustment based on token metadata (18 decimals for both sUSD and SNX)
- **Time aggregation**: Data aggregated to daily boundaries using timestamp truncation, with missing days filled using zero values
- **Final calculation**: Earnings calculated as revenue minus expenses (earnings = total_fees_usd - total_token_incentives_usd), representing the protocol's net profit after paying staker rewards

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

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

SynthetixSNX

Earnings

Earnings

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