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

Cosmos Hub is an interoperability & security platform for blockchains and applications. Cosmos was founded by Ethan Buchman & Jae Kwon and launched in 2019.

ATOM holders own and govern the protocol. They currently take a cut of the total transaction fees paid by users (revenue). Cosmos’s investors include Paradigm, IOSG Ventures, 1confirmation, etc.

governance

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Blockchains (L1)

Cosmos Hub

# Cosmos Hub Earnings Methodology

## 1. Overview

Cosmos earnings represent the protocol's net income calculated by subtracting total expenses from net revenue. This metric measures the Cosmos Hub's profitability after accounting for validator rewards and operational costs. The calculation captures revenue from both standard transaction fees and Atomic Economic Zone (AEZ) cross-chain security fees, then subtracts block reward expenses paid to validators.

## 2. Data sources

The calculation relies on several key blockchain data sources:
- **Cosmos Hub transaction records**: Transaction data including fees paid in `uatom`
- **Cosmos Hub message events**: Parsed `transfer` events capturing cross-chain fees from AEZ zones
- **ATOM supply tracking data**: Daily snapshots of total ATOM token supply for calculating newly minted tokens
- **End-of-day token price feeds**: Token prices from CoinGecko for USD conversion
- **Token metadata**: Decimal precision and symbol information for various Cosmos ecosystem tokens
- **Hardcoded token mappings**: Static definitions mapping token denominations to CoinGecko IDs for AEZ tokens

## 3. Step-by-step calculation

### Component A: Transaction fee collection
- **Purpose**: Capture standard transaction fees paid by users
- **Logic**: Extract `transaction_fee` amounts from Cosmos Hub transaction records. Convert amounts from micro-ATOM (`uatom`) to ATOM by dividing by 10^6. Aggregate fees by day and convert to USD using end-of-day ATOM price feeds
- **Key fields**: `transaction_fee` amounts, `block_timestamp` for daily aggregation

### Component B: AEZ cross-chain security fees  
- **Purpose**: Capture fees paid by other chains using Cosmos Hub validators for security
- **Logic**: Monitor `transfer` message events where the recipient address is `cosmos1ap0mh6xzfn8943urr84q6ae7zfnar48am2erhd` (the hub's fee collection address). Parse the `amount` field using regex to extract numeric values and token denominations. Map token denominations to CoinGecko IDs using hardcoded definitions for tokens like ELYS, STRD, NTRN, and various liquid staking tokens. Convert token amounts to proper decimal precision and then to USD
- **Key fields**: `amount` from event attributes, `recipient` address for filtering, token denomination mappings

### Component C: Total fee aggregation
- **Purpose**: Combine all fee sources into total protocol fees
- **Logic**: Sum transaction fees and AEZ fees for each day. Convert all amounts to USD using appropriate token price feeds. This represents gross fees collected by the protocol
- **Key fields**: Aggregated fee amounts in USD, daily timestamps

### Component D: Supply-side fee calculation
- **Purpose**: Calculate fees paid to validators based on governance parameters
- **Logic**: Apply percentage splits to total fees based on governance decisions. Use 98% to validators before December 20, 2022 and after May 2, 2025, but 90% to validators between those dates (due to governance proposal changes). The remaining percentage goes to the community pool
- **Key fields**: Fee amounts, timestamps for applying correct percentage splits

### Component E: Net revenue calculation  
- **Purpose**: Determine protocol revenue after validator payments
- **Logic**: Start with total fees, then subtract the supply-side fees (amounts paid to validators). This gives the net revenue retained by the protocol. Handle both positive total fees and negative supply-side fees in the union to get the final net amount
- **Key fields**: Total fees (positive), supply-side fees (subtracted as negative values)

### Component F: Token incentive expenses
- **Purpose**: Calculate block rewards minted as protocol expenses
- **Logic**: Track daily changes in total ATOM supply by comparing each day's supply with the previous day's supply. The difference represents newly minted ATOM tokens paid as block rewards to validators. Convert amounts from micro-ATOM to ATOM by dividing by 10^6, then convert to USD using end-of-day price feeds
- **Key fields**: `total_supply` for current and previous days, daily minted amounts

### Final aggregation
- **Combining components**: Net revenue minus total expenses equals earnings. Revenue comes from fees after subtracting validator payments, while expenses come from block rewards
- **Currency conversion**: All amounts converted to USD using end-of-day CoinGecko price feeds for appropriate tokens (ATOM, ELYS, STRD, etc.)
- **Time aggregation**: All data aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: Earnings = (Total Fees - Supply-side Fees Paid to Validators) - Block Reward Expenses. Forward-fill any missing daily values with zeros to ensure complete 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.

Cosmos HubATOM

Earnings

Earnings

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