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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of trading fees that are distributed to liquidity providers on Wombat Exchange, a multi-chain decentralized exchange operating across BSC, Arbitrum, Ethereum, Avalanche, Optimism, and Base. The metric is calculated by taking total trading fees and multiplying by the supply-side percentage (1 minus the protocol's revenue percentage), showing how much value flows to liquidity providers who provide capital to the exchange's pools.

## 2. Data sources

- **Blockchain events**: Parsed `Swap` and `SwapV2` events from Wombat Exchange pool contracts across BSC, Arbitrum, Ethereum, Avalanche, Optimism, and Base chains
- **Pool configuration events**: `SetHaircutRate` events that update fee tiers for different pool types, and `SetFee` events that update revenue split ratios between protocol and liquidity providers
- **Transaction data**: Transaction records from all supported chains to obtain user addresses and transaction context
- **External data**: End-of-day token price feeds for USD conversion and token metadata including decimals and symbols
- **Pool contracts**: Multiple pool types including main pools, side pools, cross-chain pools, and specialized pools for different token categories

## 3. Step-by-step calculation

### Component A: Trade event extraction
- **Purpose**: Extract and standardize swap events from multiple Wombat Exchange pool contracts across six blockchains
- **Logic**: Collect `Swap` and `SwapV2` events from various pool types including main pools, side pools, cross-chain pools, and specialized token pools. Each event contains token addresses for the trading pair, token amounts being swapped, pool contract address, and transaction details. Apply special token mapping to convert certain wrapped tokens to WOM token addresses. Join with transaction records to obtain user addresses and apply incremental processing filters based on block timestamps.
- **Key fields**: `fromToken` and `toToken` addresses, `fromAmount` and `toAmount` values, pool contract `address`, `transaction_hash`, and `block_timestamp`

### Component B: Trading volume calculation
- **Purpose**: Convert raw token amounts to standardized USD trading volumes with proper decimal correction
- **Logic**: Apply decimal correction by dividing raw token amounts by 10 raised to the power of each token's decimal places. Convert corrected amounts to USD values using end-of-day price feeds for both tokens in each trading pair. Select the minimum USD value between the two tokens to filter out potential price manipulation or stale price data. Aggregate trades by day, transaction, and pool to create standardized trading volume records.
- **Key fields**: Corrected `token0_amount` and `token1_amount`, USD-converted values, final `trading_volume` as minimum of the two USD amounts

### Component C: Fee tier application
- **Purpose**: Apply pool-specific fee rates to trading volumes to calculate gross trading fees
- **Logic**: Use hardcoded initial fee tiers ranging from 0.00002 to 0.0025 depending on pool type and chain, with main pools typically having lower tiers (0.0001) and specialized pools having higher tiers (up to 0.0025). Update fee tiers using `SetHaircutRate` events which contain new rate values in the `value` parameter. Forward-fill fee tier values for days without updates to ensure continuous coverage. Calculate total fees by multiplying trading volume by the applicable fee tier for each pool and day.
- **Key fields**: Pool-specific `fee_tier` rates, daily `trading_volume`, calculated `fees` as their product

### Component D: Revenue split determination
- **Purpose**: Determine what percentage of fees goes to the protocol versus liquidity providers
- **Logic**: Start with hardcoded initial revenue percentages set to 1.0 (100% to protocol) for all pools at launch. Update these percentages using `SetFee` events which contain new split ratios in the `retentionRatio` parameter, representing the protocol's retention rate. Convert the 18-decimal `retentionRatio` value to a percentage by dividing by 10^18. Forward-fill revenue percentage values for days without updates to maintain continuous coverage across all time periods.
- **Key fields**: `revenue_percentage` representing protocol's share, `retentionRatio` from events for updates

### Final aggregation
- **Combining components**: Join total fees with revenue split data on timestamp to determine the fee distribution for each day and pool
- **Currency conversion**: All amounts are already converted to USD using end-of-day price feeds during the trading volume calculation step
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: Calculate supply-side fees as total fees multiplied by (1 minus revenue percentage), representing the portion that flows to liquidity providers rather than the protocol treasury

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

Portion of fees distributed to service providers or supply-side participants.

Wombat ExchangeWOM

Supply-side fees

Supply-side fees

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