# Uniswap V3 Supply-side fees Methodology

## 1. Overview

Supply-side fees is calculated as the share of total fees generated by Uniswap V3 that is distributed to liquidity providers. This metric is used to quantify the direct compensation earned by supply-side participants for facilitating liquidity and executing trades across the platform's pools. Prior to the activation of the protocol fee switch, 100% of the generated fees are allocated to liquidity providers. Following the activation of the fee switch, the protocol's revenue share is deducted, and the remaining balance is distributed to the supply side.

## 2. Data sources

- **Blockchain events**: `Swap`, `Flash`, and `SetFeeProtocol` events from `Pool` contracts, and `PoolCreated` events from `Factory` contracts, covering Ethereum, Arbitrum, Optimism, Base, and 11 other chains
- **External data**: End-of-day price feeds for traded assets, and asset metadata for decimal normalization

## 3. Step-by-step calculation

### Component A: Pool and fee tier identification

- **Purpose**: Active Uniswap V3 pools, their constituent assets, and fee tiers are identified.
- **Logic**: `PoolCreated` events from `Factory` contracts are parsed to extract the pool address, asset addresses, and the pool's fee tier. Denylisted trading pairs are excluded to prevent data distortion from low-liquidity assets. Asset decimals are joined from asset metadata to enable normalization.
- **Key fields**: `account_address` (pool identification), `token0_address` and `token1_address` (asset identification), `fee_tier` (pool fee percentage)

### Component B: Trading and flash loan volume calculation

- **Purpose**: The daily USD volume of trades and flash loans executed through Uniswap V3 pools is calculated.
- **Logic**: `Swap` events from `Pool` contracts are parsed to extract swap amounts for asset 0 and asset 1. To mitigate price manipulation, the daily trading volume is calculated using the lesser USD value between the two swapped assets, based on end-of-day price feeds. `Flash` events from `Pool` contracts are parsed to extract flash loan amounts, and their USD value is calculated by summing the USD values of both assets. All asset amounts are normalized by their respective decimal precision before USD conversion.
- **Key fields**: `token0_amount` and `token1_amount` (raw asset quantities), `price_usd` (asset valuation)

### Component C: Total fee generation

- **Purpose**: Total fees generated from swaps and flash loans are calculated.
- **Logic**: Total swap fees are calculated by multiplying the daily USD trading volume of each pool by its respective fee tier. Total flash loan fees are calculated by multiplying the daily USD flash loan volume of each pool by its fee tier. These two fee components are summed to determine the total fees generated by Uniswap V3.
- **Key fields**: `trading_volume` (USD swap volume), `flash_loan_volume` (USD flash loan volume), `fee_tier` (pool fee percentage)

### Component D: Protocol revenue split tracking

- **Purpose**: The protocol's share of fees is tracked for periods when the fee switch is active.
- **Logic**: `SetFeeProtocol` events from `Pool` contracts are parsed to determine the protocol's fee share (revenue split) for each pool. Prior to the protocol fee switch activation date (December 27, 2025), the revenue split is treated as zero. After this date, protocol revenue is calculated by multiplying the trading volume by the pool's fee tier and the active revenue split percentage.
- **Key fields**: `revenue_split` (protocol fee share percentage), `block_timestamp` (timing of fee switch updates)

### Component E: Supply-side fees allocation

- **Purpose**: The final share of fees distributed to liquidity providers is determined.
- **Logic**: Supply-side fees are calculated by subtracting the protocol revenue from the total fees. Prior to the fee switch activation, because protocol revenue is zero, supply-side fees are set equal to 100% of the total fees. Post-activation, the protocol's revenue share is deducted, and the remaining fees are allocated to the supply side.
- **Key fields**: `fees` (total generated fees), `revenue` (protocol share of fees)

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

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

Supply-side fees

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 V3

Supply-side fees

Supply-side fees

Chain breakdown