Traders exchange funds through request for quotation system built on 0x protocol and aggregated AMMs. Tokenlon collects a trading fee (revenue) from trades.

Tokenlon is a non-custodial exchange protocol built on Ethereum. Tokenlon was founded by imToken team and launched in 2018.

LON tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). Tokelon's investors include IDG Capital, Qiming Venture Partners, Breyer Capital, etc.

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Tokenlon

# Tokenlon Earnings Methodology

## 1. Overview

Tokenlon earnings represent the net profit generated by the DEX aggregator protocol, calculated as trading fee revenue minus token incentive expenses. This metric measures the protocol's financial performance by capturing the difference between fees collected from user trades and rewards distributed to liquidity providers and stakers. The calculation follows standard accounting principles where earnings equal revenue minus operating expenses.

## 2. Data sources

The earnings calculation draws from multiple raw blockchain data sources:
- **Trading events**: Parsed swap events from Ethereum and Arbitrum including `Fill`, `Swapped`, `FillOrder`, and `LimitOrderFilledByProtocol` events across various Tokenlon contract versions
- **Reward distribution events**: Ethereum `Claimed` events from MerkleRedeem contracts and `RewardPaid` events from StakingRewards contracts representing liquidity mining and staking reward distributions
- **Transaction data**: Ethereum and Arbitrum transaction logs containing swap execution details and reward payment records
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal correction
- **Account classifications**: Hardcoded mapping of specific reward distribution contract addresses to categorize different types of incentive payments

## 3. Step-by-step calculation

### Component A: Fee revenue calculation
- **Purpose**: Calculate total trading fees collected from users across all supported trading venues
- **Logic**: Extract fee amounts from multiple types of swap events. For ZeroExchange `Fill` events, multiply the `takerAssetFilledAmount` by a 0.3% fee rate when the fee recipient or taker matches Tokenlon's address filter. For other swap types including AMMWrapper `Swapped`, PMM `FillOrder`, RFQ `FillOrder`, and Arbitrum LimitOrder events, calculate fees as the difference between `receivedAmount` and `settleAmount` fields. Handle native token addresses by converting them to their wrapped equivalents for consistent price lookups. Aggregate all fee amounts by day and convert to USD using end-of-day price feeds
- **Key fields**: Trading event amounts (`takerAssetFilledAmount`, `receivedAmount`, `settleAmount`), token addresses (`makerAssetAddr`, `takerToken`), contract addresses for filtering, and timestamp information

### Component B: Token incentive expenses
- **Purpose**: Calculate total token rewards distributed to users through liquidity mining and staking programs
- **Logic**: Aggregate LON token distributions from two reward mechanisms. Process `Claimed` events from MerkleRedeem contracts representing mining rewards and `RewardPaid` events from StakingRewards contracts representing staking rewards. Filter events to specific reward distribution account addresses including mining rewards and staking rewards accounts. Join with account dimension table to classify reward types. Sum all reward amounts by day and convert LON tokens to USD using end-of-day price feeds
- **Key fields**: Reward amounts (`balance` for mining rewards, `reward` for staking rewards), LON token address, reward distribution account addresses, and event timestamps

### Final aggregation
- **Combining components**: Join daily fee revenue and token incentive expenses by date and chain, with zero-filling for days without activity to ensure complete time series
- **Currency conversion**: Convert all amounts to USD using end-of-day price feeds matched by token address and date, with decimal correction applied based on token metadata
- **Time aggregation**: Truncate all event timestamps to daily boundaries and sum amounts within each day
- **Final calculation**: Subtract total daily token incentive expenses from total daily fee revenue to arrive at net daily earnings. Apply chain availability filters to ensure data quality across supported networks.

*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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