Creators & users sell NFTs on X2Y2. They receive royalties from secondary sales (supply-side fees).

X2Y2 is a non-custodial NFT marketplace protocol built on Ethereum and launched in 2022.

X2Y2 tokenholders own and govern the protocol. They currently take a cut of the total transaction fees paid by buyers (revenue).

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# X2Y2 Fees Methodology

## 1. Overview

X2Y2 fees represent the total fee revenue generated by the X2Y2 NFT marketplace from trading activity. This metric captures both protocol fees earned by X2Y2 and royalty fees paid to NFT creators, aggregated daily and converted to USD. The calculation processes raw Ethereum event logs from X2Y2's Exchange contract to extract fee structures from completed trades, then applies appropriate scaling, currency conversion, and aggregation logic.

## 2. Data sources

- **Ethereum event logs**: Parsed `EvInventory` events from the X2Y2 Exchange contract on Ethereum, containing detailed trade execution data including fee structures, trade prices, and participant addresses
- **Token metadata**: Token contract information including decimal places for proper amount scaling and token identification
- **End-of-day price feeds**: USD price data for tokens involved in trades, used for currency conversion from native token amounts to USD values

## 3. Step-by-step calculation

### Component A: Trade data extraction and processing

- **Purpose**: Extract and process raw trade data from X2Y2 Exchange contract events, converting hexadecimal encoded data to usable numeric values
- **Logic**: Parse `EvInventory` events from the X2Y2 Exchange contract on Ethereum. Use JavaScript user-defined functions to convert hexadecimal encoded token IDs and amounts to decimal numbers. Extract trade details including maker/taker addresses, NFT contract addresses, token addresses, and fee structures. Handle currency address normalization by replacing null addresses (`0x0000000000000000000000000000000000000000`) with WETH address (`0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2`). Generate unique trade identifiers by concatenating transaction hash and token ID
- **Key fields**: `transaction_hash`, `log_index`, `block_timestamp`, `maker`, `taker`, `currency`, `detail.price`, `detail.fees`, `item.data` (containing encoded NFT contract and token ID)

### Component B: Fee calculation and categorization

- **Purpose**: Calculate individual fee amounts from trade data and categorize them as protocol fees or royalty fees based on recipient addresses
- **Logic**: Process the fee structure array from each trade event, where fees are stored as percentages in parts per million. Calculate actual fee amounts by multiplying the fee percentage (divided by 10^6 to convert from parts per million) by the trade price. Categorize fees based on recipient address: fees paid to X2Y2's designated fee address (`0xd823c605807cc5e6bd6fc0d7e4eea50d3e2d66cd`) are classified as protocol fees, while fees paid to other addresses are classified as royalty fees. Sum both categories to get total fee amounts per trade
- **Key fields**: `fees.percentage`, `fees.to`, `detail.price`, calculated `protocol_fee_amount`, `royalty_amount`, and `fee_amount`

### Component C: Daily aggregation and metadata enrichment

- **Purpose**: Aggregate fee amounts by day and enrich with project and business classification metadata
- **Logic**: Truncate timestamps to day boundaries for daily aggregation. Group trades by date, chain, and other dimensional attributes. Sum total fee amounts across all trades for each day. Enrich data with project metadata including business line classification as "NFT marketplace", market sector as "nfts", business segment as "marketplace", version as "v1", and account name as "X2Y2_r1"
- **Key fields**: `timestamp`, `chain`, `business_line`, `market_sector_id`, `business_segment_id`, `account_name`, aggregated `fees`

### Final aggregation

- **Combining components**: Sum all fee amounts (both protocol fees and royalty fees) for each day, grouped by relevant dimensional attributes including chain, contract address, and token address
- **Currency conversion**: Apply Token Terminal's standard USD conversion process using end-of-day price feeds, with automatic decimal correction based on token metadata to ensure proper scaling of amounts
- **Time aggregation**: Aggregate data to daily boundaries using timestamp truncation, ensuring consistent time-based grouping across all fee transactions
- **Final calculation**: The final metric value represents the total USD value of all fees generated by X2Y2 trading activity on each day, including both platform fees earned by X2Y2 and royalty fees paid to NFT creators, with gaps filled as zeros for days with no trading activity

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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