# Uniswap V4 Supply-side fees Methodology

## 1. Overview

Supply-side fees for Uniswap V4 is defined as the share of swap fees that is distributed to liquidity providers. This metric is used to represent the direct compensation earned by liquidity providers for facilitating trades and taking on inventory risk across Uniswap V4 pools. Prior to the activation of the protocol fee switch, 100% of the swap fees are allocated to the supply side. Following the activation of the fee switch, a portion of the fees is retained by the protocol as revenue, and the remaining balance is distributed to liquidity providers.

## 2. Data sources

- **Blockchain events**: `Initialize`, `Swap`, and `ProtocolFeeUpdated` events from `PoolManager` contracts, covering Ethereum, Arbitrum, Base, Optimism, and 7 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 initialization and metadata mapping

- **Purpose**: Identify active Uniswap V4 pools and map their asset decimals.
- **Logic**: `Initialize` events from `PoolManager` contracts are parsed to extract the pool identifier, the addresses of the two assets in the pool, and the hooks contract address. If either asset address is identified as a null address, it is replaced with the corresponding wrapped native asset address. Asset decimals are joined from asset metadata to enable normalization.
- **Key fields**: `pool_id`, `token0_address`, `token1_address`, `hooks_address`

### Component B: Trade extraction and volume calculation

- **Purpose**: Extract swap transactions and calculate raw trading volumes.
- **Logic**: `Swap` events from `PoolManager` contracts are parsed to extract the swap amounts, fee tier, and transaction details. Swap amounts are negated to align the trader's perspective with the contract's perspective. Denylisted trading pairs are excluded. Raw asset amounts are normalized by decimal precision.
- **Key fields**: `pool_id`, `fee_tier`, `token0_amount`, `token1_amount`

### Component C: USD valuation and price manipulation filtering

- **Purpose**: Convert trading volumes to USD while mitigating price manipulation.
- **Logic**: Normalized asset amounts are multiplied by end-of-day asset prices. To prevent distortion from low-liquidity or manipulated pools, the daily trading volume is calculated using the lesser USD value of the two traded assets.
- **Key fields**: `price_usd`, `trading_volume`

### Component D: Total fee calculation

- **Purpose**: Calculate the total fees generated by swaps.
- **Logic**: Total fees are calculated by multiplying the daily USD trading volume of each pool by its respective fee tier. The fee tier is extracted from the swap event and normalized by dividing by one million.
- **Key fields**: `trading_volume`, `fee_tier`

### Component E: Protocol revenue and supply-side fee allocation

- **Purpose**: Determine the final share of fees allocated to liquidity providers.
- **Logic**: Prior to December 27, 2025, the protocol fee switch is inactive, meaning protocol revenue is set to zero and supply-side fees are equated to 100% of total fees. From December 27, 2025, onward, the protocol fee switch is activated, and protocol revenue is calculated based on the designated revenue split. The revenue split is determined by tracking protocol fee updates from `ProtocolFeeUpdated` events emitted by `PoolManager` contracts, where the directional protocol fee rate (selected based on the swap direction) is divided by the total swap fee. Supply-side fees are then calculated by subtracting the protocol revenue from the total fees.
- **Key fields**: `fees`, `revenue`, `fees_supply_side`

*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 V4

Supply-side fees

Supply-side fees

Chain breakdown