# Uniswap V2 Expenses Methodology

## 1. Overview

Expenses is defined as the total operational and promotional costs incurred by Uniswap V2 to incentivize liquidity providers. These costs are represented by incentives distributed to users who stake liquidity pool assets in staking contracts. Through the tracking of these distributions, the efficiency of capital attraction and the overall sustainability of the protocol's incentive programs are evaluated.

## 2. Data sources

- **Blockchain events**: `RewardPaid` events from `StakingRewards` contracts, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata for the UNI governance asset

## 3. Step-by-step calculation

### Component A: Liquidity incentive tracking

- **Purpose**: Identify and extract reward distributions paid to liquidity providers
- **Logic**: `RewardPaid` events are parsed from `StakingRewards` contracts on Ethereum. These events are filtered to include only transactions associated with specific Uniswap V2 liquidity incentive accounts, which correspond to pools such as DAI-ETH, ETH-USDT, WBT-ETH, and USDC-ETH. The reward amount and the reward asset address (UNI) are extracted for each event.
- **Key fields**: `block_timestamp`, `account_address`, `token_address`, and `amount`

### Component B: Normalization and USD conversion

- **Purpose**: Convert raw reward amounts into normalized USD values
- **Logic**: Raw reward amounts are normalized by the decimal precision of the reward asset using asset metadata. The normalized amounts are then multiplied by the end-of-day price of the UNI asset, sourced from end-of-day price feeds, to determine the USD value of the incentives.
- **Key fields**: `amount`, `token_address`, and `price_usd`

### Component C: Daily aggregation

- **Purpose**: Aggregate the calculated expenses to a daily granularity
- **Logic**: The USD-denominated incentives are aggregated by day using UTC boundaries. Since Uniswap V2 does not incur protocol-level cost of revenue, the total expenses for Uniswap V2 are set equal to these aggregated incentives.
- **Key fields**: `timestamp`, `expenses`

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

Total project operating and incentive expenses.

Expenses

Exchanges (DEX)

Liquidity providers deposit funds into Uniswap and receive trading fees from traders (supply-side fees).

Uniswap is a non-custodial exchange protocol built on Ethereum. Uniswap was founded by Hayden Adams and launched in 2018.

UNI tokenholders own and govern the protocol. They do not currently take a cut of the total trading fees paid by traders (revenue). Uniswap's investors include Paradigm, a16z, USV, etc.

Uniswap V2

Expenses

Expenses

Chain breakdown