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

Hedera is a decentralized enterprise-grade public network that uses proof-of-stake hashgraph consensus to offer low & fixed fees, 10k TPS, and instant transaction finality. Hedera was founded by Leemon Baird, Mance Harmon, etc. and launched in 2019.

HBAR holders own and govern the protocol. They currently take a cut of the total transaction and query fees paid by users (revenue). Hedera’s investors include BlockTower Capital, Continue Capital, Unanimous Capital, etc.

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Hedera

# Hedera Expenses Methodology

## 1. Overview

The Hedera expenses metric measures the network's operational costs by tracking token-based incentives paid to validators and delegators. This metric captures the daily USD value of HBAR rewards distributed by the Hedera network from its designated reward accounts. These reward payments represent the network's primary operational expense for maintaining consensus and security through economic incentives.

## 2. Data sources

- **Hedera HBAR transfers**: Native HBAR transfer events from the Hedera ledger, including transaction metadata, account addresses, and transfer amounts
- **Network reward accounts**: Transactions specifically from Hedera's designated reward distribution accounts (`0.0.800` for staking rewards and `0.0.801` for node rewards)
- **External price data**: End-of-day HBAR price feeds from CoinGecko for USD conversion
- **Transaction metadata**: Block timestamps, transaction hashes, and account identifiers from Hedera ledger data

## 3. Step-by-step calculation

### Component A: HBAR transfer extraction
- **Purpose**: Extract all native HBAR transfer events from Hedera ledger data
- **Logic**: Collect all HBAR transfer records including block timestamps, transaction details, account addresses, and transfer amounts. This creates a comprehensive dataset of all native token movements on the Hedera network
- **Key fields**: `block_timestamp` for timing, `account_address` for identifying participants, `transfer_amount` for quantifying value transfers

### Component B: Network reward identification
- **Purpose**: Identify token incentive payments made by the Hedera network to validators and delegators
- **Logic**: Filter HBAR transfers to include only positive amounts originating from the network's designated reward accounts. Account `0.0.800` distributes staking rewards to delegators, while account `0.0.801` distributes node rewards to validators. Only positive transfer amounts are included since these represent outbound reward payments from the network
- **Key fields**: `account_address` filtered to `0.0.800` and `0.0.801`, `transfer_amount` filtered to positive values only

### Component C: Unit conversion and daily aggregation
- **Purpose**: Convert raw transfer amounts to standard HBAR units and aggregate to daily totals
- **Logic**: Convert transfer amounts from tinybar units to HBAR by dividing by 100,000,000 (1e8), as tinybar is the smallest unit on Hedera. Aggregate all reward payments within each day by summing the converted HBAR amounts. Use daily timestamp truncation to group transactions by date
- **Key fields**: `transfer_amount` converted to HBAR units, `timestamp` truncated to daily granularity

### Component D: USD conversion
- **Purpose**: Convert daily HBAR reward totals to USD values for standardized reporting
- **Logic**: Apply end-of-day HBAR to USD conversion rates using CoinGecko price feeds. Match daily reward totals with corresponding market prices to calculate USD equivalent values
- **Key fields**: `token_incentives` in HBAR converted to USD amounts using external price data

### Final aggregation
- **Combining components**: Daily HBAR reward amounts are converted to USD and treated as network expenses
- **Currency conversion**: End-of-day HBAR prices from CoinGecko applied to daily reward totals
- **Time aggregation**: All reward payments within each day are summed to create daily expense totals
- **Final calculation**: The final expense value equals the daily USD value of all HBAR rewards paid by the network to validators and delegators, representing the network's operational cost for maintaining security and consensus through economic incentives

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

Total project operating and incentive expenses.

HederaHBAR

Expenses

Expenses

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