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).

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Cardano

# Cardano Fees Methodology

## 1. Overview

Fees measures the total value paid by users to perform operations on the Cardano blockchain. Transaction costs are incurred for both simple asset transfers and the execution of smart contract scripts. This metric is used to represent the total economic value generated by the network. All collected fees are utilized for the compensation of stake pool operators and the funding of the Cardano treasury.

## 2. Data sources

- **Blockchain events**: Transaction records from the Cardano blockchain
- **External data**: End-of-day price feeds for the native ADA asset

## 3. Step-by-step calculation

### Component A: Transaction fee extraction

- **Purpose**: Raw fees are captured from every transaction recorded on the network.
- **Logic**: Transaction records are parsed from the Cardano blockchain. The fee associated with each unique transaction hash is identified and extracted from the transaction metadata.
- **Key fields**: `fees` (raw fee amount), `block_timestamp` (transaction timing).

### Component B: Native asset normalization

- **Purpose**: Raw Lovelace values are converted into the native ADA unit.
- **Logic**: Fees are normalized by decimal precision to ensure values are represented in ADA rather than Lovelace. This adjustment is performed to align the raw on-chain data with the standard unit of account for the network.

### Component C: USD conversion and aggregation

- **Purpose**: Fees are normalized to USD for cross-asset comparison and reporting.
- **Logic**: Daily fee totals are calculated by summing all normalized transaction fees within UTC day boundaries. These daily totals are multiplied by end-of-day price feeds for the native ADA asset. This process ensures that the economic value is consistently represented in USD across the entire historical time series.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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