Liquidity providers deposit collateral and mint volatility tokens. Traders can then purchase these volatility tokens to express views on market volatility.

Volmex enables VIX-like indices for crypto assets and trading functionality on Ethereum. Volmex was founded by Cole Kennelly and launched in 2021.

The Volmex team and investors own and govern the protocol. They currently charge a minting and redemption fee (revenue). Volmex’s investors include Three Arrows Capital, Robot Ventures, CMS Holdings etc.

github

twitter

discord

website

Derivative exchanges

Volmex

# Volmex Earnings Methodology

## 1. Overview

Volmex earnings represents the net profit generated by the Volmex protocol from volatility trading activities. The metric is calculated as revenue minus expenses, where revenue consists of trading fees collected from users interacting with Volmex volatility vaults, and expenses include token incentives (currently zero). Volmex operates volatility trading vaults that allow users to gain exposure to cryptocurrency volatility through collateralized positions, collecting fees on both deposits and withdrawals.

## 2. Data sources

The calculation relies on the following raw data sources:
- **Blockchain events**: Parsed `CollateralToken_Collateralized_event` and `CollateralToken_Redeemed_event` logs from Arbitrum, Ethereum, and Polygon networks capturing fee collection during vault interactions
- **Vault configuration**: Hardcoded vault addresses and token configurations for 12 Volmex vaults across three chains
- **Token metadata**: DAI and USDC token contract addresses and decimal configurations for different chains
- **External data**: End-of-day price feeds for USD conversion of collateral tokens (DAI, USDC)

## 3. Step-by-step calculation

### Component A: Trading fee extraction
- **Purpose**: Extract all trading fees collected by Volmex vaults from user interactions
- **Logic**: The system monitors 12 predefined Volmex vaults across Arbitrum, Ethereum, and Polygon. Each chain has 4 vault types: ETHV DAI Collateral, BTCV DAI Collateral, ETHV USDC Collateral, and BTCV USDC Collateral. For each vault, the system captures two types of events: collateralization events when users deposit collateral to open positions, and redemption events when users withdraw collateral to close positions. Both event types include a `fees` field that represents the trading fee collected by the protocol
- **Key fields**: `block_timestamp` for timing, `transaction_hash` and `log_index` for unique identification, `address` for vault identification, `fees` for the fee amount collected

### Component B: Fee aggregation and USD conversion
- **Purpose**: Convert fee amounts to USD and aggregate by day and chain
- **Logic**: Raw fee amounts are extracted from the blockchain events in the native collateral token units (DAI or USDC with their respective decimal places). The system applies decimal correction to normalize amounts, then converts to USD using end-of-day price feeds. Daily totals are calculated by aggregating all fee events within each day, grouped by chain, market sector (derivatives), business segment (perpetual), and product
- **Key fields**: `amount` as the fee value, `token_address` for price lookup, `chain` for chain-specific aggregation, `timestamp` truncated to daily boundaries

### Component C: Revenue calculation
- **Purpose**: Calculate total revenue from trading activities
- **Logic**: Volmex retains 100% of all trading fees collected, so revenue equals the total USD value of all trading fees. No fees are shared with liquidity providers or other parties. The revenue calculation takes the aggregated daily fee totals and applies data quality validations, ensuring complete time series coverage with gap-filling where needed
- **Key fields**: `fees` converted to `revenue` with 1:1 allocation ratio

### Component D: Expenses calculation
- **Purpose**: Calculate total protocol expenses
- **Logic**: Currently, Volmex has no token incentive programs or other operational expenses tracked in this calculation. All expense components are set to zero. The expenses model references token incentives but hardcodes the values to zero for all time periods and chains
- **Key fields**: `token_incentives` set to 0, aggregated as total `expenses`

### Final aggregation
- **Combining components**: The earnings calculation uses a standard profit formula where earnings equals revenue minus expenses. Since expenses are currently zero, earnings equals revenue
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds with proper decimal adjustment for DAI and USDC tokens
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with all events within a calendar day summed together
- **Final calculation**: Earnings = Revenue - Expenses = (Total Trading Fees in USD) - 0 = Total Trading Fees in USD

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

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

Volmex

Earnings

Earnings

Competitive landscape