Expenses

Overview

Expenses measures the total cost a project incurs to operate its business. This includes token incentives paid to supply/demand-side users, core contributors, or investors, as well as traditional operating expenses related to salaries, audits, infrastructure, and service providers.

Data sources

• Blockchain data, including block metadata, transaction records, smart contract events, and program instructions
• End-of-day price feeds for USD conversion
• Protocol metadata and configuration parameters for decimal normalization

Common calculation approaches

Network security and block rewards

Block subsidies and mining rewards are aggregated from blockchain data to measure the cost of network security for Layer 1 and Layer 2 blockchains. For example, block subsidies are calculated from Bitcoin and Dogecoin by identifying and summing rewards within coinbase transactions, while validator rewards are captured from Ethereum by aggregating block, uncle, and beacon chain staking rewards.

Smart contract-based incentive distribution

Operational costs and token incentives for protocol participants are derived from smart contract interactions and specific token transfers. For instance, transfers to staking reward distributors and partner payouts are captured from Ethena through ERC-20 Transfer events, while incentives for system participants are tracked from Sky by monitoring move and suck functions within Vat contracts and Bark events from Dog contracts.

Governance and treasury-led expenditures

Workforce payments, oracle costs, and other administrative expenses are identified through the monitoring of protocol-controlled treasury addresses and governance-approved distribution functions. These expenditures are tracked from projects like Sky, where diverse expense categories—including workforce payments and liquidation losses—are aggregated from various contract function calls and event logs to provide a comprehensive view of operational spend.

Note: The calculation approaches and protocol examples above are representative patterns. Individual protocol implementations may vary.