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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of protocol fees that are distributed to liquidity providers as compensation for providing liquidity to the protocol. For Synthetix, this metric is calculated as zero due to the protocol's unique tokenomics model where liquidity providers are also SNX token stakers who already receive all protocol fees through staking rewards. The calculation identifies total protocol fees first, then applies Synthetix's business model logic to determine the supply-side allocation.

## 2. Data sources

- **Blockchain events**: Parsed `Transfer` events from Ethereum and Optimism networks, specifically sUSD token transfers to Synthetix's fee collection infrastructure
- **Transaction data**: Token transfer records showing movement of synthetic USD (sUSD) tokens to the protocol's fee collector address (`0xfeefeefeefeefeefeefeefeefeefeefeefeefeef`)
- **External data**: End-of-day token price feeds for USD conversion and token metadata containing decimal place information for proper amount calculations
- **Protocol addresses**: Hardcoded addresses for sUSD tokens on Ethereum (`0x57ab1ec28d129707052df4df418d58a2d46d5f51`) and Optimism (`0x8c6f28f2f1a3c87f0f938b96d27520d9751ec8d9`), and the fee collector address

## 3. Step-by-step calculation

### Component A: Fee collection event extraction
- **Purpose**: Identify all exchange fees collected by the Synthetix protocol across supported chains
- **Logic**: Extract `Transfer` events where sUSD tokens are sent to Synthetix's designated fee collector address. Filter Ethereum token transfers for sUSD transfers to the fee collector, then perform the same filtering for Optimism network transfers. Each transfer represents fees collected from synthetic asset trading activities. Add protocol classification metadata including business line as "Synthetic assets", market sector as "derivatives", and business segment as "perpetual"
- **Key fields**: `block_timestamp` for timing, `transaction_hash` and `log_index` for event identification, `token_address` for sUSD token identification, `value` for raw fee amount, and `to_address` for fee collector verification

### Component B: Fee aggregation and USD conversion
- **Purpose**: Convert raw token amounts to standardized daily USD values
- **Logic**: Group fee collection events by day using timestamp truncation to daily boundaries. Convert raw token amounts from their native decimal representation to proper numeric values using token metadata. Apply USD conversion using end-of-day price feeds to standardize all fee amounts in dollars. Aggregate total fees per day per chain while maintaining protocol classification metadata
- **Key fields**: `timestamp` truncated to daily grain, `chain_id` for network identification, `amount` converted to proper decimals and USD values, and protocol classification fields

### Component C: Supply-side allocation logic
- **Purpose**: Apply Synthetix's unique tokenomics model to determine supply-side fee allocation
- **Logic**: Set supply-side fees to zero for all time periods and chains. This reflects Synthetix's business model where liquidity providers are SNX token stakers who receive protocol fees through staking rewards rather than through a separate liquidity provider fee share. The protocol does not split fees between different participant categories since stakers and liquidity providers are the same entities
- **Key fields**: `fees_supply_side` set to 0, maintaining all timestamp, chain, and product identification fields from the underlying fee data

### Final aggregation
- **Combining components**: The supply-side fees are derived by taking the complete fee dataset and applying the zero allocation rule across all records. No mathematical aggregation is needed since the allocation is a constant zero based on protocol design
- **Currency conversion**: All underlying fees are converted to USD using end-of-day price feeds before the supply-side allocation is applied
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with each day showing zero supply-side fees regardless of total protocol fee volume
- **Final calculation**: Supply-side fees equal zero for all time periods, as Synthetix's unified staking model means all fees flow to stakers who are also the liquidity providers, eliminating the need for a separate supply-side fee allocation

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

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

SynthetixSNX

Supply-side fees

Supply-side fees

Competitive landscape

Chain breakdown