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 Average transaction fee Methodology

## 1. Overview

Average transaction fee measures the average cost paid by users for each transaction processed on Algorand. This metric provides insight into the typical expense of interacting with the network and reflects the overall affordability of the infrastructure. The values are calculated by dividing the total fees collected by the total number of transactions within a given period.

## 2. Data sources

- **Blockchain events**: Transaction data including fees and unique identifiers from Algorand
- **External data**: End-of-day price feeds for the native ALGO asset

## 3. Step-by-step calculation

### Component A: Total fee extraction and normalization

- **Purpose**: To aggregate all fees paid for transaction execution on the network.
- **Logic**: Transaction records are parsed from Algorand to extract the `fee` field. Only records with non-null fee values are included. These fees are initially captured in microAlgos and are converted to the native ALGO asset by dividing by 1,000,000.
- **Key fields**: `fee`

### Component B: Transaction volume tracking

- **Purpose**: To determine the total number of transactions processed during the period.
- **Logic**: Distinct `transaction_id` values are counted from the Algorand transaction data. This count includes all valid transactions processed by the network.
- **Key fields**: `transaction_id`

### Component C: Average fee derivation and USD conversion

- **Purpose**: To calculate the final average transaction cost in USD.
- **Logic**: Total native fees are converted to USD using end-of-day price feeds. The average transaction fee is then derived by dividing the total USD fee value by the total transaction count. Daily granularity is maintained using UTC day boundaries.
- **Key fields**: `fees`, `transaction_count`

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

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Average transaction fee

Average transaction fee

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