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Blockchains (L1)

Berachain

# Berachain Earnings Methodology

## 1. Overview

Berachain earnings represent the protocol's net profit, calculated as total revenue minus total expenses. Revenue comes from transaction fees collected from users minus the portion paid to validators, while expenses consist of token incentives distributed through Berachain's BGT (BeraGold Token) reward system. This metric answers the fundamental question: "How much profit does the Berachain protocol generate after accounting for validator rewards and token incentive programs?"

The calculation follows the standard formula: Earnings = Revenue - Expenses, where revenue represents the protocol's net fee collection and expenses represent the cost of incentivizing network participation through BGT rewards.

## 2. Data sources

The calculation relies on several key data sources:

- **Berachain blockchain transaction records**: Complete transaction data including gas usage, gas prices, priority fees, and base fees for all transactions on the Berachain network
- **Berachain blockchain block data**: Block-level information including base fee per gas amounts and block timestamps for fee calculations
- **BlockRewardController event logs**: Parsed `BlockRewardProcessed` events from Berachain's reward controller contract that track BGT token distributions to validators and users
- **End-of-day BERA token price feeds**: Daily price data for BERA token used for USD conversion of all amounts
- **Token metadata**: BERA token information including contract address and symbol for price lookup and identification

## 3. Step-by-step calculation

### Component A: Transaction fee collection
- **Purpose**: Calculate total fees collected from all Berachain transactions
- **Logic**: Process all Berachain transactions and calculate the total gas fees paid by users. For each transaction, multiply `gas_used` by `gas_price` to get the total fee amount. Convert from wei units to BERA units by dividing by 1e18. Join with block data to obtain `base_fee_per_gas` values needed for fee breakdown calculations. Aggregate all fee amounts daily by truncating `block_timestamp` to day granularity.
- **Key fields**: `gas_used`, `gas_price`, `fee_amount`, `base_fee_per_gas`, `block_timestamp`

### Component B: Supply-side fee calculation  
- **Purpose**: Calculate the portion of transaction fees that goes to validators
- **Logic**: Determine validator rewards from transaction fees using different logic based on transaction type. For EIP-1559 transactions where `priority_fee_per_gas` is not null, multiply `priority_fee_per_gas` by `gas_used` and convert to BERA units. For legacy and EIP-2930 transactions where priority fee is null, calculate validator portion as total `fee_amount` minus `base_fee_amount` (where base fee amount equals `base_fee_per_gas` * `gas_used` converted to BERA units). Aggregate daily totals.
- **Key fields**: `priority_fee_per_gas`, `priority_fee_amount`, `base_fee_amount`, `fees_supply_side`

### Component C: Revenue calculation
- **Purpose**: Calculate net protocol revenue from transaction fees
- **Logic**: Combine total fees and supply-side fees to determine net protocol revenue. Start with total transaction fees from Component A, then subtract supply-side fees from Component B (implemented as adding negative supply-side fees). This gives the net amount retained by the protocol after paying validators. Union the positive total fees with negative supply-side fees, then aggregate by day to get daily net revenue totals.
- **Key fields**: `fees`, `fees_supply_side`, `revenue`

### Component D: Token incentive expenses
- **Purpose**: Calculate BGT token rewards distributed to validators and users
- **Logic**: Process `BlockRewardProcessed` events from Berachain's reward controller contract. For each event, extract `base_amount` (fixed BGT rewards for block production) and `reward_amount` (additional token incentives for users). Sum these amounts for each event to get total BGT distributed per block. Since BGT can be converted to BERA at a 1:1 ratio, treat the total as BERA equivalent amounts. Aggregate daily totals by truncating `block_timestamp` to day granularity.
- **Key fields**: `base_amount`, `reward_amount`, `token_incentives`

### Final aggregation
- **Combining components**: The earnings calculation uses the `calculate_earnings` macro which automatically combines revenue and expense components by subtracting total expenses from total revenue for each day
- **Currency conversion**: All BERA amounts are converted to USD using end-of-day BERA token price feeds. The conversion applies the `convert_to_usd_and_correct_decimals` macro which multiplies token amounts by daily closing prices
- **Time aggregation**: All components are aggregated to daily boundaries using `timestamp_trunc(block_timestamp, day)` to ensure consistent time alignment across revenue and expense calculations
- **Final calculation**: Daily earnings equal daily revenue minus daily expenses, where revenue represents net protocol fees (total fees minus validator fees) and expenses represent total BGT token incentives distributed, both converted to USD values

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

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

BerachainBERA

Earnings

Earnings

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