# Uniswap V4 Fees Methodology

## 1. Overview

Fees are measured as the total value paid by traders to execute swaps on Uniswap V4. These fees are paid to liquidity providers as compensation for supplying assets to the pools. The metric is utilized to assess the economic activity and fee-generation capacity of Uniswap V4.

## 2. Data sources

- **Blockchain events**: `Initialize` and `Swap` events from `PoolManager` contracts, and transaction details from native chain transactions, covering Ethereum, Arbitrum, Base, Optimism, and 7 other chains
- **External data**: End-of-day price feeds for assets, and asset metadata for decimal normalization

## 3. Step-by-step calculation

### Component A: Uniswap V4 pool initialization and metadata mapping

- **Purpose**: Identification of Uniswap V4 pools and mapping of their underlying assets.
- **Logic**: `Initialize` events from `PoolManager` contracts are parsed to extract the pool identifier, asset addresses, and the hooks contract address. If an asset address is identified as a null address, it is replaced with the wrapped native asset address of the respective chain. Asset metadata is joined to retrieve decimal precision and symbols for each asset.
- **Key fields**: `pool_id`, `token0_address`, `token1_address`, `hooks_address`, `token0_decimals`, `token1_decimals`

### Component B: Uniswap V4 swap event extraction and normalization

- **Purpose**: Capture of swap transactions and calculation of raw asset swap amounts.
- **Logic**: `Swap` events from `PoolManager` contracts are parsed to extract the transaction hash, pool identifier, fee tier, and swap amounts. The swap amounts are negated to align the trader's perspective with the contract's perspective. Transactions are joined with native chain transactions to identify the transaction sender. Denylisted pools are excluded by filtering against a list of denylisted trading pairs.
- **Key fields**: `transaction_hash`, `pool_id`, `fee_tier`, `token0_amount`, `token1_amount`, `user_address`

### Component C: Uniswap V4 trading volume calculation

- **Purpose**: Calculation of the USD-denominated trading volume for each swap.
- **Logic**: Swap amounts are normalized by dividing the raw amounts by their respective asset decimal precision. Normalized amounts are multiplied by end-of-day asset prices to determine the USD value of each asset in the swap. To prevent price manipulation distortions, the trading volume for each swap is calculated as the minimum USD value between the two swapped assets.
- **Key fields**: `token0_amount`, `token1_amount`, `price_usd`, `trading_volume`

### Component D: Uniswap V4 fee calculation and aggregation

- **Purpose**: Calculation of the total fees generated by Uniswap V4 swaps and daily aggregation.
- **Logic**: Fees are calculated for each swap by multiplying the USD-denominated trading volume by the pool's fee tier. The calculated fees are aggregated by timestamp, chain, and product. A final validation process is applied to ensure data continuity, with missing days filled with zeros.
- **Key fields**: `trading_volume`, `fee_tier`, `fees`, `timestamp`

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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 V4

Fees

Fees

Chain breakdown