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.

governance

github

twitter

etherscan

website

Blockchains (L1)

Ethereum

# Ethereum Supply-side fees Methodology

## 1. Overview

The Ethereum fees supply-side metric measures the portion of transaction fees that goes to network validators (miners/stakers) rather than being burned. This represents the supply-side revenue earned by network operators for processing transactions. The metric is calculated as the difference between total fees paid by users and the fees that are burned by the protocol.

The calculation follows the formula: Supply-side fees = Total fees paid by users - Fees burned by protocol

This metric answers the business question: "How much revenue do Ethereum validators earn from transaction fees after accounting for the fee burning mechanism?"

## 2. Data sources

The calculation relies on several core blockchain data sources:

- **Ethereum transaction logs**: Complete transaction records including gas usage, effective gas prices, blob gas usage, and blob gas prices for all Ethereum transactions
- **Ethereum block data**: Block-level information including base fee per gas amounts and block timestamps  
- **End-of-day WETH price feeds**: Token price data used to convert ETH-denominated fees to USD values
- **Token metadata**: WETH token configuration including decimal precision (18 decimals) for proper unit conversion

## 3. Step-by-step calculation

### Component A: Total fees calculation
- **Purpose**: Calculate the total amount of fees paid by users for all Ethereum transactions
- **Logic**: Extract all Ethereum transactions and combine regular gas fees with blob gas fees. For each transaction, calculate the total fee as gas used multiplied by effective gas price, plus blob gas used multiplied by blob gas price. The effective gas price includes both the base fee and priority fee components. Blob fees are included when present (post-EIP-4844). All transactions are aggregated daily by summing the total fee amounts.
- **Key fields**: `gas_used` (gas consumed by transaction), `effective_gas_price` (total gas price paid), `blob_gas_used` (blob gas consumed), `blob_gas_price` (price per blob gas unit)

### Component B: Burned fees calculation  
- **Purpose**: Calculate the portion of fees that are permanently burned by the Ethereum protocol
- **Logic**: Combine base fees and blob fees that are burned. Base fees are calculated by multiplying gas used by the base fee per gas from the corresponding block. Blob fees are calculated by multiplying blob gas used by blob gas price (all blob fees are burned). Join transaction data with block data to access the base fee per gas for each transaction. Aggregate both base fees and blob fees daily by summing the burned amounts.
- **Key fields**: `gas_used` (from transactions), `base_fee_per_gas` (from blocks), `blob_gas_used` (from transactions), `blob_gas_price` (from transactions)

### Final aggregation
- **Combining components**: The final metric uses a union approach where burned fees are negated and combined with total fees, then aggregated to calculate the net supply-side fees
- **Currency conversion**: All ETH-denominated fee amounts are converted to USD using end-of-day WETH price feeds, with gas prices first converted from wei to ETH by dividing by 10^18
- **Time aggregation**: All fee data is aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: Supply-side fees equals total fees paid by users minus total fees burned by the protocol, representing the net revenue earned by Ethereum validators

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

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

EthereumETH

Supply-side fees

Supply-side fees

Competitive landscape