Validators process transactions and receive validator rewards (supply-side fees).

AVAX is a smart contract platform for decentralized applications (a blockchain). Avalanche was founded by Emin Gün Sirer and launched in 2019.

AVAX holders own and govern the protocol. They currently take (burn) all of the total transaction fees paid by users (revenue). AVAXs investors include a16z, Polychain, Galaxy Digital, etc.

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Avalanche

# Avalanche Average revenue per user (ARPU) Methodology

## 1. Overview

Average Revenue Per User (ARPU) measures the average daily revenue generated per active user on the Avalanche blockchain. This metric is calculated by dividing daily revenue (derived from transaction fees) by the number of daily active users (unique transaction senders). ARPU provides insight into the economic value generated per user and helps assess the network's monetization efficiency.

## 2. Data sources

- **Avalanche transaction records**: Complete transaction data from the Avalanche blockchain including sender addresses, gas usage metrics, and effective gas prices
- **End-of-day price feeds**: Token price data for WAVAX (Wrapped AVAX) used for USD conversion of gas fees
- **Token metadata**: Contract information for the WAVAX token (`0xb31f66aa3c1e785363f0875a1b74e27b85fd66c7`)

## 3. Step-by-step calculation

### Component A: Transaction processing
- **Purpose**: Extract and standardize transaction data for both revenue and user calculations
- **Logic**: Processes raw Avalanche transaction records to extract key fields including sender addresses (`from_address`), gas usage (`receipt_gas_used`), and effective gas prices (`receipt_effective_gas_price`). Gas prices are converted from wei to AVAX by dividing by 10^18. Each transaction is tagged with the WAVAX token address for price conversion purposes.
- **Key fields**: `block_timestamp`, `from_address`, `gas_used`, `effective_gas_price`, `token_address`

### Component B: Daily fee aggregation
- **Purpose**: Calculate total gas fees paid per day
- **Logic**: Groups transactions by day and sums the product of `gas_used` and `effective_gas_price` for each transaction. This gives the total AVAX spent on gas fees per day across all Avalanche transactions.
- **Key fields**: `timestamp` (truncated to day), `fee_amount` (sum of gas fees in AVAX)

### Component C: Revenue calculation with USD conversion
- **Purpose**: Convert daily gas fees to USD revenue
- **Logic**: Takes daily fee amounts in AVAX and converts them to USD using end-of-day WAVAX price feeds. Since all gas fees on Avalanche are burned (not paid to validators), the entire fee amount represents protocol revenue. The conversion uses the `convert_to_usd_and_correct_decimals` function with WAVAX price data.
- **Key fields**: `fees` (converted to USD), `token_address` (WAVAX for price lookup)

### Component D: Daily active user counting
- **Purpose**: Count unique transaction senders per day
- **Logic**: Extracts unique sender addresses (`from_address`) from transaction data, grouped by day. Uses HyperLogLog sketches for efficient counting of distinct users, which allows for accurate aggregation across different dimensions (chain, user type, product). All transaction senders are classified as "Transaction sender" user type within the "blockchains_l1" market sector.
- **Key fields**: `user_address` (from `from_address`), `user_type`, `timestamp` (truncated to day)

### Component E: User aggregation with HyperLogLog
- **Purpose**: Create efficient unique user counts across multiple dimensions
- **Logic**: Builds HyperLogLog sketches of user addresses for each day, then aggregates these sketches across different breakdowns including project-level totals, chain-level counts, and user-type-level counts. The HyperLogLog approach allows for accurate distinct counting while maintaining computational efficiency.
- **Key fields**: `user_dau` (distinct count from HyperLogLog), `dimensions` (aggregation level), `chain_id`, `user_type`

### Final aggregation
- **Combining components**: Daily revenue (in USD) is divided by daily active users (distinct count) to calculate ARPU. Both metrics are joined by date to ensure alignment.
- **Currency conversion**: All revenue amounts are converted to USD using end-of-day WAVAX price feeds, with gas prices first converted from wei to AVAX units.
- **Time aggregation**: All calculations use daily boundaries with timestamps truncated to day level. Missing days are filled with zero values to maintain continuous time series.
- **Final calculation**: ARPU = Daily Revenue (USD) ÷ Daily Active Users, where revenue comes from burned gas fees and users are unique transaction senders per day.

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

AvalancheAVAX

Average revenue per user (ARPU)

Average revenue per user (ARPU)

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