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 Token incentives Methodology

## 1. Overview

Token incentives are measured as the total value of native ADA assets distributed by Cardano to stakeholders who secure the network through staking. These rewards are issued to participants on an ongoing basis as compensation for their contribution to the protocol's consensus and security. The metric represents the economic cost of maintaining the network's supply-side operations and is considered analogous to stock-based compensation in traditional finance.

## 2. Data sources

- **Blockchain events**: Epoch reward data captured 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: Epoch reward extraction

- **Purpose**: Capture the total quantity of native assets distributed as rewards for each network epoch
- **Logic**: Total rewards are extracted from epoch data records. Reward values, originally denominated in lovelace, are normalized by decimal precision to calculate the total ADA distributed during each epoch.
- **Key fields**: `total_rewards` (quantity of assets), `start_time` (epoch commencement)

### Component B: Daily reward distribution

- **Purpose**: Allocate epoch-based rewards to a daily granularity for time-series analysis
- **Logic**: Total epoch rewards are distributed linearly across the standard five-day duration of a Cardano epoch. The total reward quantity calculated for each epoch is divided by five to determine the daily reward amount for each timestamp within that epoch's range.
- **Key fields**: `staking_rewards_ada` (normalized epoch total), `day_offset` (distribution interval)

### Component C: USD conversion and aggregation

- **Purpose**: Normalize reward values to USD and ensure data continuity
- **Logic**: Daily reward amounts in ADA are multiplied by the end-of-day price of the native ADA asset. A fill-forward strategy is applied to ensure the metric remains continuous across all daily intervals. Final values are aggregated into a daily time series using UTC day boundaries.
- **Key fields**: `price_usd` (asset price), `timestamp` (daily interval)

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

Value of native tokens distributed as incentives.

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Token incentives

Token incentives

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