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

# Ethereum Fees Methodology

## 1. Overview

This metric calculates the total daily fees paid by users on the Ethereum network. It represents the sum of all gas fees (including blob gas fees from EIP-4844) paid to validators for transaction processing and inclusion in blocks. The metric answers the business question: "How much are users paying in total to use the Ethereum network each day?" The calculation aggregates transaction-level fee data, converts from ETH to USD, and presents daily totals.

## 2. Data sources

The calculation relies on the following raw data sources:
- **Ethereum transaction records**: Complete transaction data including gas usage metrics, effective gas prices, and blob gas information for all Ethereum mainnet transactions
- **End-of-day price feeds**: ETH to USD exchange rate data used for currency conversion
- **Token metadata**: WETH contract information used as the reference token address for fee categorization

## 3. Step-by-step calculation

### Component A: Transaction fee extraction
- **Purpose**: Extract and process individual transaction fee components from raw Ethereum transaction data
- **Logic**: The system processes each Ethereum transaction record and extracts gas usage data (`receipt_gas_used`, `receipt_blob_gas_used`) and pricing information (`receipt_effective_gas_price`, `receipt_blob_gas_price`). Gas prices are converted from wei to ETH by dividing by 10^18. The model handles both traditional gas fees and blob gas fees introduced with EIP-4844, ensuring compatibility with post-Cancun upgrade transactions.
- **Key fields**: `gas_used`, `blob_gas_used`, `effective_gas_price`, `blob_gas_price`, `block_timestamp`, `transaction_hash`

### Component B: Transaction-level fee calculation
- **Purpose**: Calculate the total fee paid for each individual transaction
- **Logic**: For each transaction, the total fee is calculated by multiplying gas usage by gas price for both regular gas and blob gas. The formula is: total fee = (`gas_used` × `effective_gas_price`) + (`blob_gas_used` × `blob_gas_price`). The blob gas component is optional and defaults to zero for transactions that don't use blob space. All calculations are performed in ETH units.
- **Key fields**: `fee_amount` (calculated total fee per transaction)

### Component C: Daily aggregation
- **Purpose**: Aggregate all transaction fees to daily totals
- **Logic**: Transaction fees are grouped by day using timestamp truncation (`timestamp_trunc(block_timestamp, day)`). All fee amounts for transactions within each calendar day are summed to create daily fee totals. The aggregation uses the transaction's block timestamp to determine the day boundary.
- **Key fields**: `timestamp` (truncated to day), `fees` (sum of all transaction fees for the day)

### Final aggregation
- **Combining components**: Daily ETH fee totals from the aggregation step are passed through for currency conversion
- **Currency conversion**: ETH amounts are converted to USD using end-of-day exchange rates through the `convert_to_usd_and_correct_decimals` macro, with decimal correction disabled since fees are already in ETH units
- **Time aggregation**: Daily boundaries are determined by timestamp truncation to calendar days based on block timestamps
- **Final calculation**: The final metric represents the total USD value of all fees paid on Ethereum each day, including both traditional gas fees and blob gas fees, formatted with appropriate business metadata including the WETH token address as reference and blockchain categorization

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

Total value users pay to use a protocol (gross fees, user-paid fees).

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