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

Cardano is a smart contract platform for decentralized applications (a blockchain). Cardano was founded by Charles Hoskinson & Jeremy Wood and launched in 2017.

ADA holders own and govern the protocol. They currently do not take a cut of the total transaction fees paid by users (revenue).

governance

github

twitter

website

Blockchains (L1)

Cardano

# Cardano Earnings Methodology

## 1. Overview

Earnings measures the net on-chain profitability of Cardano by subtracting operating expenses from protocol revenue. Protocol revenue is defined as the 20% portion of transaction fees directed to the Cardano treasury, while operating expenses are represented by the staking rewards distributed to network participants. This metric provides an assessment of the protocol's sustainability by comparing its primary income source against its incentive costs.

## 2. Data sources

- **Blockchain events**: Transaction data and epoch reward data (ingested via the Koios API), covering Cardano
- **External data**: End-of-day price feeds for the native ADA asset

## 3. Step-by-step calculation

### Component A: Protocol revenue calculation

- **Purpose**: Calculate the portion of transaction fees retained by the Cardano treasury
- **Logic**: All transaction fees are extracted from the blockchain and normalized by decimal precision. Protocol revenue is determined by applying a 20% allocation to these fees, representing the fixed treasury expansion parameter (tau). The resulting values are aggregated daily and converted to USD using end-of-day price feeds.

### Component B: Operating expense tracking

- **Purpose**: Quantify the cost of staking rewards distributed to participants
- **Logic**: Staking rewards are ingested for each epoch. Because Cardano epochs occur over five-day intervals, the total rewards per epoch are distributed linearly across the corresponding five days to calculate daily values. These amounts are normalized by decimal precision and converted to USD to be classified as operating expenses.

### Component C: Earnings aggregation

- **Purpose**: Calculate the final net earnings for the protocol
- **Logic**: Earnings is calculated by subtracting operating expenses from protocol revenue. The final values are aggregated at a daily granularity with a zero-fill strategy applied to ensure a continuous time series.

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

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

CardanoADA

Earnings

Earnings

Competitive landscape