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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Derivative exchanges

Synthetix

# Synthetix Expenses Methodology

## 1. Overview

Synthetix expenses represents the total value of SNX token incentives distributed by the protocol as operational expenses. This metric captures the cost of incentivizing users to stake SNX tokens and provide liquidity across various synthetic asset markets. The calculation aggregates SNX token rewards from two primary sources: staking rewards paid to liquidity providers and fee pool rewards distributed from trading fees, then converts these amounts to USD values on a daily basis.

## 2. Data sources

The calculation relies on several raw data sources:
- **Blockchain events**: Parsed `FeesClaimed` events from Synthetix FeePool contracts on Ethereum and Optimism, capturing SNX rewards distributed from protocol trading fees
- **Blockchain events**: Parsed `RewardPaid` events from over 20 different Synthetix staking rewards contracts on Ethereum and Optimism, covering rewards for synthetic BTC, ETH, various synthetic assets, and liquidity pool tokens
- **External data**: End-of-day SNX token price feeds for USD conversion
- **Token metadata**: SNX token contract addresses and decimal configurations for proper amount calculations

## 3. Step-by-step calculation

### Component A: Staking rewards extraction
- **Purpose**: Captures SNX token rewards paid to users for staking and providing liquidity across synthetic asset markets
- **Logic**: The system processes `RewardPaid` events from multiple staking rewards contracts across Ethereum and Optimism. On Ethereum, this includes rewards from shorting contracts for synthetic BTC and ETH, dual rewards programs, various Balancer and Curve LP staking contracts, and Uniswap LP rewards for different synthetic assets like sTSLA, sAAPL, sAMZN, and others. On Optimism, it covers SNX-WETH and sUSD-DAI Uniswap V3 LP rewards. Each event captures the `reward` amount in raw SNX tokens along with the recipient address and transaction details.
- **Key fields**: Events include `reward` amounts, recipient `address`, `block_timestamp` for timing, and contract-specific metadata. All rewards are standardized with business classification as 'Synthetic assets' business line, 'derivatives' market sector, and 'perpetual' business segment.

### Component B: Fee pool rewards extraction  
- **Purpose**: Captures SNX token rewards distributed to stakers from protocol trading fee revenues
- **Logic**: The system processes `FeesClaimed` events from FeePool contracts on both Ethereum and Optimism. These events occur when SNX stakers claim their share of trading fees generated by the protocol. The `snxRewards` field contains the amount of SNX tokens distributed as rewards from the fee pool to individual stakers.
- **Key fields**: Events include `snxRewards` amounts representing fee-based rewards, recipient `address`, `block_timestamp`, and standardized business metadata matching the staking rewards classification.

### Component C: Data combination and standardization
- **Purpose**: Unifies the two reward types into a consistent daily time series with proper business categorization
- **Logic**: Both staking rewards and fee pool rewards are combined using a union operation. Timestamps are truncated to daily boundaries to aggregate all rewards within each 24-hour period. All records receive consistent business metadata classification regardless of their source contract, with synthetic assets as the business line, derivatives as the market sector, and perpetual as the business segment identifier.
- **Key fields**: The unified dataset includes `timestamp` truncated to day level, `chain` identifier (ethereum or optimism), `token_address` pointing to SNX contracts, `amount` containing raw token rewards, and standardized business classification fields.

### Final aggregation
- **Combining components**: Staking rewards and fee pool rewards are combined through a union operation, creating a complete view of all SNX token distributions across both reward mechanisms
- **Currency conversion**: Raw SNX token amounts undergo decimal correction (adjusting for 18-decimal precision) and conversion to USD using end-of-day SNX price feeds, ensuring consistent valuation timing
- **Time aggregation**: All rewards within each calendar day are aggregated by chain and product dimensions, with timestamps standardized to daily boundaries for consistent time series analysis
- **Final calculation**: The final expenses metric represents the sum of all USD-converted SNX token incentives distributed per day per chain, with a fill-zeros strategy applied to ensure complete time series coverage without gaps in the data

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

Total project operating and incentive expenses.

SynthetixSNX

Expenses

Expenses

Competitive landscape

Chain breakdown