Liquidity providers deposit funds into Wombat Exchange and receive WOM token rewards.

Wombat Exchange is a non-custodial exchange protocol built on BNB Chain. Wombat Exchange was founded by Alex Lee and launched in April 2022.

WOM tokenholders own and govern the protocol. They currently receive all trading fees paid by traders (revenue). Wombat Exchange’s investors include Binance Labs, Animoca Brands and Hailstone Ventures.

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Wombat Exchange

# Wombat Exchange Expenses Methodology

## 1. Overview

Wombat expenses measures the total USD value of token incentives distributed daily by the Wombat protocol to liquidity providers. This metric captures the protocol's operational costs for incentivizing liquidity provision across its automated market maker (AMM) pools. The calculation aggregates all incentive payments from Wombat's MasterWombat contracts, converts them to USD, and reports them as daily expenses.

## 2. Data sources

- **Blockchain events**: Parsed `Harvest` events from Wombat's MasterWombat and MasterWombatV3 contracts on Arbitrum and BSC chains
- **Contract addresses**: Specific incentive distribution contracts including Master Wombat V2 on BSC, Master Wombat V3 on BSC and Arbitrum
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal correction
- **Token information**: WOM token addresses across different chains (Arbitrum and BSC)

## 3. Step-by-step calculation

### Component A: Raw incentive event extraction

- **Purpose**: Identify and extract all token incentive distribution events from Wombat's liquidity mining contracts
- **Logic**: Extract `Harvest` events from MasterWombat contracts across Arbitrum and BSC chains. These events are emitted when users claim their liquidity mining rewards from Wombat pools. The events contain the recipient address, token amounts, and transaction details. Only events from verified Wombat incentive distribution contracts are included
- **Key fields**: Block timestamp (`block_timestamp`), recipient address (`address`), token amount (`amount`), transaction hash (`transaction_hash`), and log index (`log_index`)

### Component B: Account validation and classification

- **Purpose**: Validate that incentive payments come from legitimate Wombat distribution contracts
- **Logic**: Cross-reference event source addresses against a predefined list of known Wombat incentive distribution accounts. This includes Master Wombat V2 on BSC, Master Wombat V3 on BSC, and Master Wombat V3 on Arbitrum. Events are only included if they originate from these verified contracts, ensuring data quality and preventing inclusion of invalid or spam transactions
- **Key fields**: Account address (`account_address`), account name (`account_name`), and chain identifier (`chain`)

### Component C: Token standardization and decimal correction

- **Purpose**: Convert raw token amounts to standardized decimal-corrected quantities
- **Logic**: Apply decimal correction to token amounts using token metadata to ensure proper value calculation. WOM tokens may have different decimal places on different chains, so this step normalizes all amounts to their true token quantities. The correction ensures that a token amount like 1000000000000000000 wei becomes 1.0 tokens for an 18-decimal token
- **Key fields**: Corrected token amount after applying decimal adjustments based on token metadata

### Component D: USD conversion

- **Purpose**: Convert token amounts to USD values for consistent expense reporting
- **Logic**: Join corrected token amounts with end-of-day price feeds to convert token quantities to USD values. The conversion uses the price on the date of the incentive payment, ensuring accurate historical valuation. This step transforms token-denominated expenses into dollar-denominated expenses for business reporting
- **Key fields**: USD value of incentive payments (`token_incentives` converted to USD)

### Final aggregation

- **Combining components**: All validated and converted incentive payments are aggregated by day and chain to calculate total daily expenses
- **Currency conversion**: Token amounts are converted to USD using end-of-day price feeds matched to the payment date
- **Time aggregation**: Events are truncated to daily boundaries using the block timestamp, with all incentive payments within a day summed together
- **Final calculation**: The final expenses metric represents the total USD value of all token incentives distributed by Wombat per day, calculated as the sum of all validated, decimal-corrected, and USD-converted incentive payments for each day and chain combination

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

Total project operating and incentive expenses.

Wombat ExchangeWOM

Expenses

Expenses

Competitive landscape

Chain breakdown