Overcollateralized borrowers deposit funds into Vesta Finance and borrow VST stablecoin.

Vesta Finance is a non-custodial stablecoin protocol built on Arbitrum. Vesta Finance was founded by Mikey Milken and launched in 2022.

VSTA tokenholders own and govern the protocol. They currently take all of the total interest paid by borrowers (revenue).

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Vesta Finance

# Vesta Finance Earnings Methodology

## 1. Overview

Vesta earnings represents the net profit of the Vesta Finance protocol, calculated as total fee revenue minus total token incentive expenses. Vesta Finance is a stablecoin issuer operating on Arbitrum that generates revenue from borrowing fees, interest payments, performance fees, and redemption fees, while incurring expenses through VST and VSTA token rewards distributed to users. The metric answers the question: "What is Vesta's daily net profitability after accounting for user incentive costs?"

## 2. Data sources

The calculation relies on the following raw data sources:
- **Vesta protocol events**: Parsed Arbitrum event logs from Vesta v1 smart contracts including borrowing operations, interest management, treasury operations, vault management, savings modules, stability pools, and farming contracts
- **Price feed events**: Internal VST price updates from Vesta's `PriceFeed` contract on Arbitrum
- **End-of-day token price feeds**: External price data for ETH and other tokens used in fee calculations
- **CoinGecko price feeds**: End-of-day price data for VSTA token using the 'vesta-finance' identifier
- **Token metadata**: Decimal precision information for proper amount calculations

## 3. Step-by-step calculation

### Component A: Revenue from fees
- **Purpose**: Calculate total daily revenue from all fee types collected by Vesta
- **Logic**: Revenue comes from four main fee categories. First, borrowing fees are extracted from `VSTBorrowingFeePaid` events when users borrow VST stablecoins, with amounts normalized by dividing by 10^18 and converted to USD using internal VST price feeds. Second, interest fees are collected from `InterestMinted` events when VST interest is charged, also normalized and converted using VST prices. Third, performance fees are captured from `SafeReceived` events at the Treasury contract when rewards are received from GLP staking address and GMX staking address, with ETH amounts converted to USD using external price feeds. Fourth, redemption fees are extracted from `Redemption` events when users redeem collateral, handling null addresses as ETH and converting to USD. All fee amounts are aggregated daily by timestamp, chain, and business metadata.
- **Key fields**: Fee amounts in `amount`, fee classification in `fee_type`, token addresses for price lookups, daily timestamps for aggregation

### Component B: Expenses from token incentives  
- **Purpose**: Calculate total daily expenses from token rewards distributed to users
- **Logic**: Expenses consist of two token types distributed as user incentives. VST rewards are tracked from `UserClaimed` events in the Saving Module, with amounts normalized by dividing by 10^18 and converted to USD using internal VST price feeds aligned by daily timestamp. VSTA rewards come from two sources: Stability Provider rewards from `VSTAPaidToDepositor` events and Liquidity Provider rewards from `RewardPaid` events in the farming contract, both normalized by dividing by 10^18 and converted to USD using CoinGecko price data for the 'vesta-finance' token. All token incentive amounts are aggregated daily with consistent business line classification as 'Stablecoin issuer'.
- **Key fields**: Reward amounts in `amount`, account names for categorization, token addresses for price lookups, daily timestamps for aggregation

### Component C: Price data management
- **Purpose**: Provide accurate USD conversion rates for all fee and expense calculations
- **Logic**: VST prices are sourced from internal `TokenPriceUpdated` events from Vesta's price feed contract, with prices normalized by dividing by 10^18 and aggregated daily using average values. Missing price data is forward-filled starting from January 1, 2022 with an initial VST price of $0.99. VSTA prices are obtained from CoinGecko using the 'vesta-finance' identifier. ETH and other token prices come from standard end-of-day price feeds. All price data is aligned by daily timestamps to ensure accurate conversion timing.
- **Key fields**: Price values in `price_usd`, token addresses for matching, daily timestamps for alignment

### Final aggregation
- **Combining components**: Revenue and expense components are calculated independently using their respective intermediate models, then combined through the earnings calculation macro which subtracts total expenses from total revenue for each day and chain
- **Currency conversion**: All amounts are converted to USD using time-aligned price data before aggregation, with VST using internal price feeds and VSTA using CoinGecko feeds
- **Time aggregation**: All blockchain events are truncated to daily boundaries using `timestamp_trunc(block_timestamp, day)` for consistent daily reporting
- **Final calculation**: Daily earnings equals daily fee revenue minus daily token incentive expenses, with results standardized through the finalization macro to ensure consistent schema and handle missing data with zero-fill strategy

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

Vesta FinanceVSTA

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