Liquidity providers deposit funds to the lending pool and receive a portion of the interest (supply-side fees).

TrueFi is a non-custodial lending protocol built on Ethereum offering undercollateralized loans for verified borrowers. TrueFi was founded by Rafael Cosman and launched in 2020.

TRU tokenholders own and govern the protocol. They currently take a cut of the interest and an origination fee (revenue). TrueFi’s investors include a16z, BlockTower Capital, Alameda Research etc.

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TrueFi

# TrueFi Average fees per user (AFPU) Methodology

## 1. Overview

AFPU measures the average daily fee revenue generated per active user on the TrueFi lending protocol. This metric helps assess the monetization efficiency of the platform by dividing total daily fees by the number of daily active users. The calculation aggregates fee revenues from lending activities across all three versions of the TrueFi protocol (v1, v2, v3) and divides by the count of unique users who performed lending or borrowing activities on each day.

## 2. Data sources

The calculation relies on these underlying data sources:

- **TrueFi protocol events**: Parsed Ethereum blockchain events from TrueFi v1, v2, and v3 smart contracts including user deposits, withdrawals, loan creations, repayments, and fee changes
- **Ethereum transaction traces**: Function call data for loan funding operations and portfolio creation transactions
- **Token transfer events**: Ethereum token transfer records to validate actual fund movements and calculate loan amounts
- **End-of-day price feeds**: Daily USD price data for all tokens used in the TrueFi ecosystem
- **Token metadata**: Token contract information including symbols and decimal precision for proper amount calculations
- **Portfolio configuration data**: TrueFi v3 portfolio metadata including manager fee rates and underlying token information

## 3. Step-by-step calculation

### Component A: User activity tracking
- **Purpose**: Identifies all users who interacted with TrueFi protocols on each day
- **Logic**: Extracts user addresses from deposit and withdrawal events across all three protocol versions. For v1 and v2, captures users from `Pool_Joined_event` (depositors) and `Pool_Exited_event` (withdrawers). For v3, captures users from `ManagedPortfolio_Deposited_event` (depositors) and `ManagedPortfolio_Withdrawn_event` (withdrawers). Each event provides the user address, timestamp, and activity type. Users are aggregated daily using HyperLogLog for efficient distinct counting across multiple dimensions including chain, user type, and product.
- **Key fields**: User addresses (`staker`, `lender`), event timestamps, activity classification (Depositor/Withdrawer)

### Component B: V1 fee calculation
- **Purpose**: Calculates fees and interest income from TrueFi v1 lending pools
- **Logic**: Combines explicit origination fees and interest income. Explicit fees come directly from `Pool_Borrow_event` records via the `fee` field. Interest income is calculated by matching borrowing and repayment events through escrow addresses, then subtracting the borrow amount from the repayment amount. Token transfers are validated against predefined v1 market and token addresses to ensure data accuracy. Both fees and interest are aggregated daily and converted to USD.
- **Key fields**: Borrow `fee` amounts, `escrow_address` for matching loans to repayments, token transfer `value` amounts

### Component C: V2 fee calculation  
- **Purpose**: Calculates interest income from TrueFi v2 lending operations
- **Logic**: V2 generates revenue only through interest since there are no explicit origination fees. Interest is calculated by matching loan funding operations (from `TrueLender_fund_function` calls) with settlement events (`LoanToken_Settled_event`) using escrow addresses. Liquidated loans are excluded from interest calculations. For valid repayments, interest equals the returned amount minus the original loan amount, but only when the returned amount exceeds the loan amount. Token transfers validate the actual fund movements.
- **Key fields**: Loan token addresses (`loanToken`), settlement amounts (`returnedAmount`), escrow matching keys

### Component D: V3 fee calculation
- **Purpose**: Calculates comprehensive fees from TrueFi v3 managed portfolios including origination fees, manager fees, and interest
- **Logic**: V3 has the most complex fee structure with three components. First, protocol origination fees are calculated as 0.5% annualized based on loan amount and duration (amount × duration_in_years × 0.005). Second, manager fees use variable rates that can change over time, calculated as amount × duration_in_years × manager_fee_rate. Manager rates come from `ManagerFeeChanged_event` history or default to the initial rate from portfolio creation. Third, interest income is calculated for completed loans by subtracting the original loan amount from the repayment amount. Loan completion timestamps are derived by adding loan duration to the creation timestamp.
- **Key fields**: Loan amounts (`principalAmount`), durations (`loanDuration`), manager fee rates, repayment amounts (`repaymentAmount`)

### Component E: V3 portfolio and fee rate management
- **Purpose**: Tracks dynamic manager fee rates for accurate V3 fee calculations
- **Logic**: Maintains a time-series of manager fee rates for each portfolio. Initial rates come from portfolio creation events (`ManagedPortfolioFactory_createPortfolio_function`). Rate changes are tracked through `ManagerFeeChanged_event` records with effective timestamps. When calculating fees, the system identifies the applicable rate by matching the loan creation timestamp to the appropriate rate period using time-bounded joins.
- **Key fields**: Portfolio addresses, manager fee rates (4 decimal places), effective date ranges

### Final aggregation
- **Combining components**: All fee components (v1 fees + v1 interest + v2 interest + v3 fees + v3 interest) are summed daily across all protocol versions and token types. User counts from all protocol versions are combined using HyperLogLog merge operations to get accurate distinct daily user counts.
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds and adjusted for proper decimal places based on token metadata. The conversion applies the appropriate token decimals and retrieves prices for the transaction date.
- **Time aggregation**: Both fees and user counts are truncated to daily boundaries using the transaction timestamp. Missing days are filled with zeros to maintain continuous time series data.
- **Final calculation**: AFPU equals total daily fees in USD divided by total daily active users. The division handles edge cases where user count is zero to prevent division errors. The result represents the average fee revenue generated per user on each day.

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

TrueFiTRU

Average fees per user (AFPU)

Average fees per user (AFPU)

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