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 Revenue Methodology

## 1. Overview

Wombat revenue represents the protocol's share of trading fees collected from decentralized exchange activity across Wombat Exchange pools. The metric measures how much revenue the protocol generates from its trading infrastructure by applying dynamic fee tiers to trading volume and then taking the protocol's percentage of those fees. This answers the business question: "How much revenue does Wombat Exchange generate from its DEX operations across all supported chains?"

The calculation follows the formula: Revenue = Trading Volume × Fee Tier × Revenue Percentage, where each component is dynamically managed through blockchain events and aggregated daily across all pools and supported chains.

## 2. Data sources

The calculation relies on several types of blockchain and external data:

- **Blockchain events**: Parsed `Swap` events from over 45 different Wombat Exchange pool contracts across BSC, Arbitrum, Ethereum, Avalanche, Optimism, and Base blockchains
- **Governance events**: Parsed `SetHaircutRate` events for dynamic fee tier updates and `SetFee` events for protocol revenue split changes
- **Transaction data**: Blockchain transaction records from all supported chains to identify user addresses and transaction context
- **External data**: End-of-day price feeds for USD conversion and token metadata including symbols and decimal precision
- **Token metadata**: Token contract information including decimal places and symbols for proper amount calculations

## 3. Step-by-step calculation

### Component A: Trade extraction
- **Purpose**: Collect all trading activity from Wombat Exchange pools across supported blockchains
- **Logic**: Extract `Swap` events from 45+ different pool contracts including main pools, side pools, cross-chain pools, and specialized asset pools. Each event captures the pool address, input token, output token, trade amounts, user address, and blockchain transaction details. Wrapped token addresses are normalized to their underlying tokens to ensure consistency across different pool types.
- **Key fields**: `block_timestamp`, `transaction_hash`, `account_address` (pool), `user_address`, `token0_address`, `token1_address`, `token0_amount`, `token1_amount`

### Component B: Trading volume calculation
- **Purpose**: Convert raw token amounts to standardized USD trading volumes
- **Logic**: Join trade data with token metadata to correct for decimal places, then apply end-of-day USD price feeds to convert token amounts to USD values. For each swap, calculate USD values for both input and output tokens, then take the minimum value to prevent price manipulation attacks. Aggregate volumes daily by pool and chain while preserving transaction-level detail for fee calculations.
- **Key fields**: `timestamp`, `chain`, `account_address`, `trading_volume`, `fee_tier`

### Component C: Fee tier management
- **Purpose**: Track dynamic fee rates for each pool over time
- **Logic**: Start with hardcoded initial fee tiers per pool (ranging from 0.00002 to 0.0025 depending on pool type and risk profile). Track updates through `SetHaircutRate` events that modify fee tiers based on governance decisions. Forward-fill fee tier values to ensure continuous coverage for all days, maintaining the most recent fee tier until a new update occurs.
- **Key fields**: `timestamp`, `chain`, `account_address`, `fee_tier`

### Component D: Fee calculation
- **Purpose**: Calculate total trading fees generated by each pool
- **Logic**: Multiply trading volume by the applicable fee tier for each pool and time period. This represents the total fees collected from traders, which will then be split between the protocol and liquidity providers according to the revenue split configuration.
- **Key fields**: `timestamp`, `account_address`, `fees`

### Component E: Revenue split management
- **Purpose**: Track the protocol's percentage share of collected fees
- **Logic**: Start with hardcoded initial revenue percentages (typically 100% to protocol initially). Monitor `SetFee` events that contain `retentionRatio` parameters indicating changes to the protocol's share of fees. Forward-fill revenue percentages to maintain continuity across time periods. The remaining percentage goes to liquidity providers as additional incentives.
- **Key fields**: `timestamp`, `chain`, `account_address`, `revenue_percentage`

### Final aggregation
- **Combining components**: Join fee calculations with revenue split percentages by timestamp, chain, and pool address to calculate protocol revenue for each pool and time period
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds at the time of each trade
- **Time aggregation**: Data is aggregated to daily boundaries using transaction timestamps truncated to day level
- **Final calculation**: Protocol Revenue = Total Fees × Revenue Percentage, where fees come from trading volume multiplied by dynamic fee tiers, and revenue percentage represents the protocol's share versus liquidity provider incentives

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

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Revenue

Revenue

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