Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Energy Web X is energy blockchain ecosystem powered by Polkadot Relay chain.

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Energy Web X

# Energy Web X Earnings Methodology

## 1. Overview

Energy Web Chain earnings represents the net profit generated by the Energy Web blockchain protocol, calculated as total protocol revenue minus operational expenses. This metric measures the protocol's financial performance by subtracting the cost of block rewards paid to validators from the transaction fees collected from users. The calculation provides insight into whether the protocol generates positive cash flow after covering its primary operational cost of network security through validator incentives.

## 2. Data sources

The earnings calculation relies on the following raw data sources:

- **Energy Web Chain blockchain events**: Substrate-based parachain event logs containing structured data about on-chain activities including block production rewards and transaction fee payments
- **Block reward events**: Parsed `Rewarded` events from the `parachainStaking` pallet that record validator and delegator reward distributions  
- **Transaction fee events**: Parsed `TransactionFeePaid` events from the `transactionPayment` pallet that capture fee and tip amounts for each transaction
- **End-of-day price feeds**: Energy Web Token price data from CoinGecko API used for USD conversion
- **Token metadata**: Energy Web Token decimal precision (18 decimals) and identifier information

## 3. Step-by-step calculation

### Component A: Base event processing
- **Purpose**: Extract and structure raw blockchain events from Energy Web Chain's substrate-based parachain
- **Logic**: Raw blockchain events are filtered and organized by timestamp, with daily partitioning applied. Events are categorized by `pallet` (substrate module) and `method` (specific function) to identify relevant reward and fee events. The `event_data` field contains JSON arrays with event-specific parameters that need parsing.
- **Key fields**: `timestamp`, `event_pallet`, `event_method`, `event_data`, `extrinsic_id`, `block_number`

### Component B: Block reward processing  
- **Purpose**: Calculate token incentives paid to validators and delegators for securing the network
- **Logic**: Filter events to the `parachainStaking` pallet with `Rewarded` method. Parse the reward amount from the second element of the `event_data` JSON array. Convert amounts from wei (10^18 base units) to whole tokens by dividing by 10^18. Aggregate rewards daily by summing all reward events within each day.
- **Key fields**: `amount` (from event_data[1]), `timestamp`, `block_number`

### Component C: Transaction fee processing
- **Purpose**: Calculate total fees collected from network users for transaction processing
- **Logic**: Filter events to the `transactionPayment` pallet with `TransactionFeePaid` method. Extract both `transaction_fee` from event_data[1] and `transaction_tip` from event_data[2]. Sum these amounts to get total fee per transaction. Convert from wei to whole tokens by dividing by 10^18. Aggregate daily by summing all transaction fees within each day.
- **Key fields**: `transaction_fee`, `transaction_tip`, `extrinsic_id`, `timestamp`

### Component D: Token incentives calculation
- **Purpose**: Aggregate and convert block rewards to USD for expense calculation
- **Logic**: Sum all daily block rewards and apply currency conversion using end-of-day Energy Web Token prices from CoinGecko. The token incentives represent the protocol's cost of securing the network through validator rewards.
- **Key fields**: `token_incentives`, `coingecko_id` ('energy-web-token')

### Component E: Revenue calculation  
- **Purpose**: Calculate total protocol revenue from transaction fees
- **Logic**: Sum all daily transaction fees to get gross revenue. Subtract any supply-side fees (fees that go to external parties rather than the protocol). For Energy Web Chain, supply-side fees are set to zero as all fees are retained by the protocol. Apply USD conversion using end-of-day token prices.
- **Key fields**: `fees`, `fees_supply_side` (set to 0)

### Component F: Expenses calculation
- **Purpose**: Calculate protocol operational expenses 
- **Logic**: Map token incentives directly to expenses, as these represent the protocol's primary operational cost for maintaining network security through validator rewards.
- **Key fields**: `expenses` (equal to `token_incentives`)

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently then combined using the earnings formula: Earnings = Revenue - Expenses
- **Currency conversion**: Both revenue and expenses are converted to USD using end-of-day Energy Web Token prices from CoinGecko before the final calculation
- **Time aggregation**: All data is aggregated to daily boundaries using timestamp truncation, with calculations performed on daily totals
- **Final calculation**: The final earnings metric is calculated by subtracting total daily expenses (validator rewards) from total daily revenue (transaction fees), both expressed in USD. Any missing days are filled with zeros to ensure complete time series coverage.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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