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 Supply-side fees Methodology

## 1. Overview

Supply-side fees represent the portion of transaction fees that are paid to Hedera network validators (node operators) for processing transactions. This metric measures the daily revenue earned by network validators, providing insight into the economic incentives for maintaining network security and operations. The calculation identifies HBAR transfers to node operators that represent their compensation from transaction fees.

## 2. Data sources

- **Hedera HBAR transfers**: Native cryptocurrency transfer records from the Hedera network, including sender, recipient, amount, and associated transaction details
- **Hedera transaction records**: Complete transaction data including transaction fees, node assignments, transaction types, and execution details
- **External data**: End-of-day price feeds for HBAR to USD conversion

## 3. Step-by-step calculation

### Component A: HBAR transfer data extraction
- **Purpose**: Extract all HBAR transfers from the Hedera network to identify payments to node operators
- **Logic**: Retrieve all HBAR transfer records including block timestamps, transaction hashes, account addresses, transfer amounts, and associated node information. Each transfer record shows the movement of HBAR between accounts with the specific node that processed the transaction.
- **Key fields**: `block_timestamp`, `transaction_hash`, `account_address`, `transfer_amount`, `node`

### Component B: Transaction fee data extraction  
- **Purpose**: Obtain transaction fee information to determine total fees charged for each transaction
- **Logic**: Extract complete transaction records from Hedera including the total fee charged for each transaction, along with transaction identifiers that can be matched to transfer records. This provides the baseline for determining what portion of fees goes to supply-side participants.
- **Key fields**: `transaction_hash`, `block_timestamp`, `fee_charged`, `transaction_type`, `node`

### Component C: Supply-side fee identification
- **Purpose**: Identify the specific HBAR transfers that represent payments to node operators (supply-side fees)
- **Logic**: Join HBAR transfer data with transaction data using transaction hash and block timestamp. Filter for transfers where the account address equals the node address (indicating the transfer is going to the node operator) and where the transfer amount is positive and smaller than the total transaction fee. This filtering isolates the portion of transaction fees that are distributed to network validators rather than burned or used for other purposes.
- **Key fields**: `timestamp`, `node`, `transfer_amount` (filtered for supply-side payments)

### Component D: Daily aggregation
- **Purpose**: Aggregate supply-side fees by day to create daily metrics
- **Logic**: Truncate timestamps to day boundaries and sum all supply-side transfer amounts for each day. This creates daily totals of fees distributed to network validators across all transactions and nodes.
- **Key fields**: `timestamp` (daily), `amount` (aggregated transfer amounts)

### Final aggregation
- **Combining components**: Sum all daily supply-side transfer amounts to get total daily fees paid to validators
- **Currency conversion**: Convert from tiny-bar units to HBAR by dividing by 1e8, then convert to USD using end-of-day HBAR price feeds
- **Time aggregation**: Daily boundaries using timestamp truncation to day level
- **Final calculation**: The final supply-side fees metric represents the total USD value of HBAR transferred to network node operators each day as compensation for processing transactions

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

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

HederaHBAR

Supply-side fees

Supply-side fees

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