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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of transaction fees that are paid to protocol developers, token holders, or other supply-side participants rather than validators/miners. For Avalanche, supply-side fees are set to 0, reflecting the Layer 1 blockchain structure where all transaction fees are paid to validators who secure the network. This metric answers the business question: "How much revenue does the Avalanche protocol generate for supply-side participants?" The answer is zero, as Avalanche operates as a pure Layer 1 blockchain with no fee sharing mechanism for protocol development or token holders.

## 2. Data sources

The calculation uses the following underlying data sources:
- **Avalanche blockchain transaction records**: Raw transaction data from the Avalanche C-Chain containing gas usage, gas prices, block timestamps, and transaction hashes
- **End-of-day AVAX price feeds**: Daily price data for AVAX token to convert fee amounts from native tokens to USD
- **Token metadata**: WAVAX contract address (`0xb31f66aa3c1e785363f0875a1b74e27b85fd66c7`) used as the identifier for AVAX fees

## 3. Step-by-step calculation

### Component A: Transaction fee extraction
- **Purpose**: Extract all transaction fee data from Avalanche blockchain
- **Logic**: Pull all Avalanche transactions including gas usage metrics. Convert effective gas price from wei (smallest AVAX unit) to AVAX by dividing by 10^18. Calculate individual transaction fees as gas used multiplied by effective gas price in AVAX. Include transaction metadata like block timestamp, transaction hash, and addresses.
- **Key fields**: `gas_used` (computational units consumed), `effective_gas_price` (price per gas unit in AVAX), `block_timestamp` (when transaction occurred), `transaction_hash` (unique identifier)

### Component B: Daily fee aggregation  
- **Purpose**: Sum all transaction fees to daily totals
- **Logic**: Group transactions by day using block timestamp truncated to day boundaries. Sum all individual transaction fees (gas_used * effective_gas_price) for each day to get total daily fee amounts in AVAX.
- **Key fields**: `timestamp` (daily boundary), `fee_amount` (total daily fees in AVAX)

### Component C: USD conversion and standardization
- **Purpose**: Convert fees to USD and apply standard metric schema
- **Logic**: Join daily fee amounts with end-of-day AVAX price feeds to convert from AVAX to USD. Apply standard metric metadata including market sector (`blockchains_l1`), business segment (`blockchain`), and chain identifier (`avalanche`). Use WAVAX contract address as the token identifier since AVAX fees are represented through the wrapped AVAX token.
- **Key fields**: `fees` (daily fee amounts in USD), `chain_id`, `token_address`, `market_sector_id`, `business_segment_id`

### Final aggregation
- **Supply-side allocation**: Explicitly set `fees_supply_side` to 0 for all records, reflecting Avalanche's Layer 1 blockchain structure where all transaction fees go to validators rather than protocol developers or token holders
- **Schema finalization**: Apply standard metric finalization including data validation, gap filling with zeros, and chain availability filtering to ensure consistent time series data
- **Final calculation**: Supply-side fees = 0 for all days, regardless of total fee amounts, because Avalanche operates as a pure Layer 1 blockchain with no revenue sharing mechanism for supply-side participants

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

Portion of fees distributed to service providers or supply-side participants.

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Supply-side fees

Supply-side fees

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