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

Ethereum is a smart contract platform for decentralized applications (a blockchain). Ethereum was founded by Vitalik Buterin, Anthony Di Iorio, Mihai Alisie, etc. and launched in 2015.

ETH holders own and govern the protocol. They currently take a cut of the total transaction fees (base fee) paid by users (revenue). Ethereum’s investors include KR1, Block Ventures, 8 Decimal Capital, etc.

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# Ethereum Average fees per user (AFPU) Methodology

## 1. Overview

Average Fees Per User (AFPU) measures the average daily transaction fees paid per active user on the Ethereum network. This metric answers the business question of how much revenue the network generates per user on average, providing insight into user engagement value and network monetization efficiency. The calculation divides total daily fees collected by the network by the number of unique daily active users, expressed in USD.

## 2. Data sources

The calculation relies on the following raw data sources:

- **Blockchain transaction data**: Raw Ethereum transaction records containing transaction metadata, gas usage details, gas pricing information, sender and recipient addresses, and blob gas usage for post-EIP-4844 transactions
- **External price data**: End-of-day token price feeds providing ETH/USD exchange rates for currency conversion
- **Token metadata**: WETH token information (`0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2`) used as the reference token for Ethereum native fees since all gas fees are paid in ETH

## 3. Step-by-step calculation

### Component A: Daily active users identification

- **Purpose**: Count unique users who performed transactions on Ethereum each day
- **Logic**: Extract all transaction sender addresses from raw Ethereum transaction records. Each `from_address` represents a user who initiated a transaction. Group transactions by day using timestamp truncation to daily boundaries. Apply HyperLogLog sketching algorithm to efficiently count distinct user addresses per day across different dimensional breakdowns including project-level, chain-level, user-type level, and product-level aggregations.
- **Key fields**: `from_address` (transaction sender), `block_timestamp` (transaction timing), `user_type` (classified as "Transaction sender"), `chain` (set to "ethereum")

### Component B: Daily fee calculation

- **Purpose**: Calculate total transaction fees collected by the Ethereum network each day
- **Logic**: Extract gas usage and pricing information from raw Ethereum transaction records. For each transaction, calculate the total fee by multiplying `gas_used` by `effective_gas_price`. For post-EIP-4844 transactions, add blob gas fees by multiplying `blob_gas_used` by `blob_gas_price`. Convert gas prices from wei to ETH by dividing by 10^18. Aggregate all transaction fees by day using timestamp truncation to daily boundaries.
- **Key fields**: `gas_used` (gas consumed), `effective_gas_price` (actual gas price paid), `blob_gas_used` (blob gas consumed), `blob_gas_price` (blob gas price), `block_timestamp` (transaction timing)

### Component C: Currency conversion

- **Purpose**: Convert daily ETH fees to USD for standardized reporting
- **Logic**: Take the daily aggregated fee amounts denominated in ETH and apply currency conversion using end-of-day ETH/USD price feeds. The conversion uses the WETH token address as the reference since Ethereum fees are paid in native ETH.
- **Key fields**: `fees` (daily ETH amounts), `token_address` (WETH reference), price feed data (ETH/USD rates)

### Final aggregation

- **Combining components**: The daily active user counts and daily fee amounts (in USD) are joined by date to create matched daily pairs of users and fees
- **Currency conversion**: Fees are converted from ETH to USD using end-of-day price feeds applied to the daily fee totals
- **Time aggregation**: Both components use daily timestamp truncation to align on consistent 24-hour periods
- **Final calculation**: AFPU is calculated by dividing the total daily fees (in USD) by the count of unique daily active users for each day. The result represents the average fee contribution per user per day. A fill-zeros strategy ensures continuous daily time series by setting AFPU to zero for days with no activity rather than leaving gaps.

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

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Average fees per user (AFPU)

Average fees per user (AFPU)

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