Validators process transactions and receive fees from users (supply-side fees).

Algorand is a smart contract platform for decentralized applications (a blockchain). Algorand was founded by Silvio Micali and launched in 2018.

ALGO holders own and govern the protocol. They currently take a cut of the transaction fees paid by users (revenue). Algorand's investors include Union Square Ventures, Multicoin Capital, Pillar, etc.

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Algorand

# Algorand Earnings Methodology

## 1. Overview

Earnings measures the net value retained by the Algorand network after all expenses are subtracted from revenue. Revenue is represented by transaction fees, while expenses are represented by token incentives. These incentives are comprised of block-header rewards (participation and consensus rewards) and governance rewards. On-chain profitability is reflected by this metric, which is calculated by subtracting the total USD value of token incentives from the total USD value of transaction fees.

## 2. Data sources

- **Blockchain events**: Transaction fee data, block-header rewards (comprising participation rewards and consensus rewards), and payment transactions from explicit governance pool addresses, covering Algorand
- **External data**: End-of-day price feeds for the native ALGO asset

## 3. Step-by-step calculation

### Component A: Revenue calculation

- **Purpose**: Capture total transaction fees paid on the network
- **Logic**: Transaction fees are extracted from the `fee` field of all transactions on Algorand. Daily transaction fees are aggregated, normalized by decimal precision, and converted to USD using end-of-day price feeds.

### Component B: Block-header rewards extraction

- **Purpose**: Capture network-level token incentives distributed via blocks
- **Logic**: Block-header rewards are extracted from the `rewards_rate` (representing participation rewards) and `proposer_payout` (representing consensus rewards) fields in Algorand blocks. These values are summed, normalized by decimal precision, and converted to USD using end-of-day price feeds.

### Component C: Governance rewards extraction

- **Purpose**: Capture token incentives distributed through the governance program
- **Logic**: Payment transactions of type `pay` are filtered to identify senders matching the 14 explicit governance pool addresses during their respective quarterly distribution windows. The payment amounts are summed, normalized by decimal precision, and converted to USD using end-of-day price feeds.

### Component D: Earnings aggregation

- **Purpose**: Calculate the final net earnings of the network
- **Logic**: Total expenses are calculated as the sum of block-header rewards and governance rewards. Earnings are then calculated by subtracting total expenses from total revenue. Daily values are zero-filled for days with missing data to ensure continuity.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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Earnings

Earnings

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