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 Supply-side fees Methodology

## 1. Overview

Cardano Supply-side fees is measured as the share of total transaction fees distributed to network service providers, specifically Stake Pool Operators (SPOs) and delegators. This metric represents the economic incentives provided to participants for maintaining the security and decentralization of the blockchain. Within the protocol's fee distribution architecture, 80% of all transaction fees are allocated to supply-side participants as rewards, while the remaining 20% is directed to the Cardano treasury.

## 2. Data sources

- **Blockchain events**: Native token transfers from the Cardano blockchain, covering Cardano
- **External data**: End-of-day price feeds for the native ADA asset

## 3. Step-by-step calculation

### Component A: Transaction fee extraction and normalization

- **Purpose**: Identify and normalize the total volume of fees paid on the network
- **Logic**: Total transaction fees are extracted from native token transfers. Values, which are recorded on-chain in lovelace, are normalized by decimal precision to be expressed in ADA.
- **Key fields**: `block_timestamp` (timing), `fees` (transaction costs in lovelace)

### Component B: Supply-side reward allocation

- **Purpose**: Calculate the specific portion of fees distributed to validators and stakers
- **Logic**: A fixed reward allocation of 80% is applied to the total fees. This percentage reflects the portion of the fee pool that is earmarked for distribution to the supply-side, excluding the share retained by the treasury.
- **Key fields**: `total_fees_ada` (summed transaction fees)

### Component C: USD conversion and aggregation

- **Purpose**: Normalize fee values to USD for comparative analysis
- **Logic**: Daily supply-side fee totals are multiplied by end-of-day price feeds for the native asset. Data is aggregated at a daily granularity using UTC day boundaries.
- **Key fields**: `daily_timestamp` (temporal grouping), `price_usd` (valuation)

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

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

CardanoADA

Supply-side fees

Supply-side fees

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