# Celo L1 (legacy) Supply-side fees Methodology

## 1. Overview

Supply-side fees measures the portion of transaction fees paid by users that is distributed to service providers, specifically the validators securing the Celo L1 (legacy) network. This metric represents the difference between the total gas fees paid by users and the base fees (protocol revenue). These fees incentivize validators to process transactions and maintain the security of the network.

## 2. Data sources

- **Blockchain events**: Transaction-level gas usage data, effective gas prices, and block-level base fee data from Celo L1 (legacy)
- **External data**: End-of-day price feeds for native and fee-payment assets

## 3. Step-by-step calculation

### Component A: Total gas fee calculation

- **Purpose**: Determine the total expenditure by users for transaction execution.
- **Logic**: Transaction data is parsed from the Celo L1 (legacy) blockchain. For each transaction, the total gas fee is calculated by multiplying the gas used by the effective gas price. If a specific fee currency is utilized, the corresponding asset address is identified; otherwise, the native Celo L1 (legacy) asset is used as the default.
- **Key fields**: `receipt_gas_used`, `receipt_effective_gas_price`, and `fee_currency`.

### Component B: Protocol revenue identification

- **Purpose**: Calculate the portion of fees classified as protocol revenue (base fees).
- **Logic**: Block-level data is parsed to extract the base fee per gas for every block. Protocol revenue is calculated by multiplying the gas used in each transaction by the base fee per gas of the block in which the transaction was included.
- **Key fields**: `base_fee_per_gas` from block headers and `receipt_gas_used` from transaction receipts.

### Component C: Supply-side fee derivation and USD conversion

- **Purpose**: Calculate the final validator compensation and normalize the value to USD.
- **Logic**: Supply-side fees are derived by subtracting the protocol revenue (base fees) from the total gas fees. This remaining value represents the priority fee or tip allocated to validators. The resulting amounts are normalized by decimal precision and multiplied by end-of-day price feeds. All data is aggregated at a daily granularity using UTC day boundaries.
- **Key fields**: `fees` (total gas fees) and `revenue` (base fees).

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

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

Supply-side fees

Blockchains (L1)

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

Celo is a smart contract platform for decentralized applications (a blockchain). Celo was founded by Rene Reinsberg and Marek Olszewski and launched in 2020.

CELO holders own and govern the protocol. They currently take a cut of the total transaction fees paid by users (revenue). Celo's investors include a16z, Greenfield, Electric Capital, etc.

Celo L1 (legacy)

Supply-side fees

Supply-side fees

Chain breakdown