Fraxtal batches users' transactions and submits them to Ethereum, paying a share of the transaction fees to Ethereum validators (expense).

Fraxtal is an Ethereum Layer 2 (L2) blockchain built on the OP Stack by Frax Finance. It uses frxETH as the gas token and features a blockspace incentive system called Flox. Fraxtal launched in February 2024.

Frax Finance team owns and governs the protocol. Frax Finance's investors include Dragonfly Capital, Mechanism Capital, Galaxy Digital, etc.

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Fraxtal

# Fraxtal Expenses Methodology

## 1. Overview

Expenses measures the total cost incurred by Fraxtal to operate its Layer 2 network and incentive programs. The primary operating expense for the protocol consists of L1 settlement fees paid to Ethereum for transaction data availability and execution. This metric also accounts for token incentives distributed to users or contributors, providing a comprehensive view of the protocol's operational expenditures.

## 2. Data sources

- **Blockchain events**: Transaction data from Ethereum for the Fraxtal sequencer address
- **External data**: End-of-day price feeds for the native Ethereum asset (ETH)

## 3. Step-by-step calculation

### Component A: L1 settlement cost tracking

- **Purpose**: To calculate the cost of settling Fraxtal transaction data on the Ethereum mainnet.
- **Logic**: Transactions on Ethereum are filtered to identify those sent to the Fraxtal sequencer address. For each identified transaction, the total gas cost is calculated by multiplying the gas used by the effective gas price. Additionally, blob gas costs are accounted for by multiplying blob gas used by the blob gas price. These two values are summed to determine the total settlement cost per transaction.
- **Key fields**: `receipt_effective_gas_price`, `receipt_gas_used`, `receipt_blob_gas_price`, and `receipt_blob_gas_used`.

### Component B: Token incentive accounting

- **Purpose**: To measure costs related to protocol-emitted incentives.
- **Logic**: Token incentives for Fraxtal are currently set to a constant value of zero. This value is aggregated at a daily granularity to be combined with other expense components.
- **Key fields**: `token_incentives` (hardcoded to zero).

### Component C: USD conversion and final aggregation

- **Purpose**: To normalize all expense components into a standard currency and aggregate them at the protocol level.
- **Logic**: Settlement costs denominated in the native Ethereum asset are normalized by decimal precision and multiplied by end-of-day price feeds. Total expenses are calculated as the sum of these USD-denominated settlement costs and token incentives. The final values are aggregated by day using UTC boundaries.

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

Total project operating and incentive expenses.

FraxtalFXTL

Expenses

Expenses

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