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

Verse is an automated market maker-based decentralized exchange built on Ethereum. Verse was created by Bitcoin.com, and launched in 2022.

VERSE tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). Verse's investors include Blockchain.com, KuCoin Ventures and others.

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Verse

# Verse Average fees per user (AFPU) Methodology

## 1. Overview

Average Fees Per User (AFPU) measures the average daily fees generated per active trader on the VerseX decentralized exchange. This metric answers the business question: "How much fee revenue does each active user generate on average per day?" The calculation divides total daily fees by the number of daily active users, providing insight into user monetization efficiency and trading behavior patterns.

## 2. Data sources

The AFPU calculation relies on several core blockchain and external data sources:

- **VerseX swap events**: Parsed `Swap` events from VerseX v1 smart contracts on Ethereum, containing token amounts, user addresses, and trade details
- **VerseX pair creation events**: Parsed `PairCreated` events from VerseX v1 factory contracts establishing trading pairs and fee structures
- **Ethereum transaction records**: Transaction data providing user identification through `from_address` fields
- **End-of-day token price feeds**: Daily USD price data for tokens traded on the platform
- **Token metadata**: Token information including symbols and decimal places for proper amount normalization

## 3. Step-by-step calculation

### Component A: Trading pair dimensions
- **Purpose**: Establishes the trading pairs available on VerseX with their associated fee structures
- **Logic**: Processes `PairCreated` events from the VerseX v1 factory contract on Ethereum to identify all trading pairs. Each pair consists of two token addresses (`token0_address`, `token1_address`) with a hardcoded fee tier of 0.3% (represented as 3000/10^6). Token metadata is joined to provide decimal places and symbols for proper amount calculation and pair naming
- **Key fields**: `account_address` (pair contract), `token0_address`, `token1_address`, `fee_tier` (0.3%), `token0_decimals`, `token1_decimals`, `account_name` (token symbol pair)

### Component B: Trade processing
- **Purpose**: Captures all trading activity and calculates token amount changes for each swap
- **Logic**: Extracts `Swap` events from VerseX v1 pair contracts on Ethereum, calculating net token changes by subtracting outgoing amounts from incoming amounts for both tokens in each pair. Joins with Ethereum transaction data to identify the actual user initiating each trade through the `from_address` field. Filters for transactions occurring after June 14, 2022 (platform launch)
- **Key fields**: `user_address` (transaction initiator), `token0_amount` (net change), `token1_amount` (net change), `block_timestamp`, `account_address` (trading pair)

### Component C: Trading volume calculation  
- **Purpose**: Converts raw token amounts to USD trading volumes with price manipulation protection
- **Logic**: Aggregates trades on a daily basis, applies decimal correction using token metadata to normalize amounts, and takes absolute values to capture trading volume regardless of buy/sell direction. Joins with end-of-day price feeds for both tokens in each trading pair. Implements price manipulation protection by taking the lesser USD value between the two tokens in each swap (using `least()` function), defaulting to zero if price data is unavailable
- **Key fields**: `trading_volume` (USD value of trades), `timestamp` (daily), `user_address`, `fee_tier`

### Component D: Fees calculation
- **Purpose**: Calculates total fees generated from trading activity
- **Logic**: Multiplies the USD trading volume by the fixed fee tier percentage (0.3%) for each trade. Aggregates fees daily across all trading pairs and users
- **Key fields**: `fees` (USD fees generated), `timestamp` (daily), `chain_id`

### Component E: Daily active users calculation
- **Purpose**: Counts unique users who executed trades each day
- **Logic**: Extracts distinct user addresses from trade transactions, counting unique traders per day using HyperLogLog for efficient aggregation. Creates multiple dimensional breakdowns including project-level (total), chain-level, user-type-level, and product-level aggregations. Users are classified as type "Trader" and identified by their transaction `from_address`
- **Key fields**: `user_dau` (distinct daily active users), `timestamp` (daily), `user_type` ("Trader"), `dimensions` (aggregation level)

### Final aggregation  
- **Combining components**: The AFPU calculation uses a macro that divides daily fees by daily active users for the same time period and dimensional scope
- **Currency conversion**: All fees are already converted to USD during the trading volume calculation phase using end-of-day price feeds
- **Time aggregation**: Both fees and user counts use daily boundaries based on `timestamp_trunc(block_timestamp, day)` to ensure consistent time windows
- **Final calculation**: AFPU equals total daily fees divided by daily active user count, with missing days filled with zeros to maintain continuous time series data for reporting purposes

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

VerseVERSE

Average fees per user (AFPU)

Average fees per user (AFPU)

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