# Uniswap V4 Revenue Methodology

## 1. Overview

Revenue measures the portion of fees that is retained by the protocol, as determined by its take rate. For Uniswap V4, revenue is calculated as the protocol's share of swap fees collected from liquidity pools where the protocol fee switch has been activated. This protocol take rate is dynamically configured per pool and is split from the total swap fees paid by traders. This metric is utilized to assess the direct earnings generated by Uniswap V4 before any operational expenses or distributions.

## 2. Data sources

- **Blockchain events**: `Initialize`, `ProtocolFeeUpdated`, and `Swap` events from `PoolManager` contracts, covering Ethereum, Arbitrum, Base, Optimism, and 7 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Pool initialization and metadata mapping

- **Purpose**: Uniswap V4 liquidity pools are identified and their associated assets are mapped.
- **Logic**: `Initialize` events from `PoolManager` contracts are parsed to extract the pool ID, asset0 address, asset1 address, and hooks address. If an asset address matches the null address, it is replaced with the wrapped native asset address. Asset metadata is joined to retrieve decimal precision and symbols for each asset.
- **Key fields**: `pool_id`, `currency0`, `currency1`, `hooks`

### Component B: Protocol fee rate tracking

- **Purpose**: The dynamic protocol fee rates configured for each pool are tracked.
- **Logic**: `ProtocolFeeUpdated` events from `PoolManager` contracts are parsed to extract the packed protocol fee value. This value is unpacked into two directional rates in pips: a rate for asset0-to-asset1 swaps (bits 0-11) and a rate for asset1-to-asset0 swaps (bits 12-23). These rates are stored in an interval-based dimension table, where each rate is valid from the block of its update until the next update event.
- **Key fields**: `pool_id`, `protocolFee`, `protocol_fee_zero_for_one`, `protocol_fee_one_for_zero`

### Component C: Swap execution and revenue split calculation

- **Purpose**: Swap events are captured and the protocol's revenue share per trade is calculated.
- **Logic**: `Swap` events from `PoolManager` contracts are parsed to extract swap amounts and total swap fees. The swap fee is normalized by its decimal scale factor. The direction of the swap is determined by the sign of the asset0 amount; the asset0-to-asset1 protocol fee rate is selected if the asset0 amount is negative, whereas the asset1-to-asset0 rate is selected if the asset0 amount is positive. The revenue split (the protocol's share of the swap fee) is calculated as the selected protocol fee rate divided by the total swap fee. Denylisted trading pairs are excluded by filtering against a list of accounts with limited price feed support.
- **Key fields**: `pool_id`, `amount0`, `amount1`, `fee`, `protocol_fee_zero_for_one`, `protocol_fee_one_for_zero`

### Component D: USD conversion and volume aggregation

- **Purpose**: Swap amounts are converted to USD and trading volumes are aggregated.
- **Logic**: Swap amounts are normalized by dividing by the decimal precision of their respective assets. Normalized amounts are multiplied by end-of-day asset prices. To mitigate price manipulation, the daily trading volume for each swap is determined by taking the lesser USD value between the asset0 and asset1 swap amounts.
- **Key fields**: `amount0`, `amount1`, `price_usd`

### Component E: Revenue calculation and finalization

- **Purpose**: The final protocol revenue in USD is calculated and aggregated by day.
- **Logic**: Daily revenue is calculated by multiplying the daily trading volume by the product of the fee tier and the revenue split. This calculation is applied only for timestamps on or after the protocol fee switch activation date. The resulting revenue values are aggregated by day, chain, and product, and any days without activity are populated with zero values.
- **Key fields**: `trading_volume`, `fee_tier`, `revenue_split`, `timestamp`

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

Revenue

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

Revenue

Revenue

Chain breakdown