# Katana Chain Expenses Methodology

## 1. Overview

Expenses measures the total cost a project incurs to operate its business. This includes token incentives paid to supply/demand-side users, core contributors, or investors, as well as traditional operating expenses related to salaries, audits, infrastructure, and service providers. For Katana Chain, Layer 1 settlement costs (classified as cost of revenue) and KAT asset incentives distributed to liquidity providers are aggregated. These expenses are incurred to maintain network security, settle transactions to Layer 1, and incentivize liquidity on Katana Chain. All expenses are normalized to USD using end-of-day price feeds to enable standardized financial analysis.

## 2. Data sources

- **Blockchain events**: `Claimed` events from `Distributor` contracts, and transaction execution data including gas usage and Layer 1 fee metrics, covering Katana Chain
- **External data**: End-of-day price feeds and asset metadata for native gas assets and KAT

## 3. Step-by-step calculation

### Component A: Katana Chain Layer 1 settlement costs

- **Purpose**: The determination of Layer 1 data availability and settlement costs incurred by Katana Chain.
- **Logic**: Transaction data is parsed to extract Layer 1 gas metrics. The Layer 1 gas fee is calculated by taking the Layer 1 fee directly, or by multiplying the Layer 1 gas used by the Layer 1 gas price and the Layer 1 fee scalar. These values are normalized by decimal precision to represent the cost in native ETH.
- **Key fields**: `l1_fee`, `l1_gas_used`, `l1_gas_price`, `l1_fee_scalar`

### Component B: Katana Chain incentives

- **Purpose**: The measurement of the value of KAT asset emissions distributed to liquidity providers.
- **Logic**: `Claimed` events from the canonical Merkl `Distributor` contract are filtered for KAT and wrapped KAT assets (including V1 and V2 versions). Claims of wrapped KAT are normalized 1:1 to canonical KAT to prevent double-counting. The raw claim amounts are aggregated daily.
- **Key fields**: `token_address`, `amount`

### Component C: USD conversion and aggregation

- **Purpose**: The normalization of all expense components to USD and their subsequent aggregation.
- **Logic**: For incentives, raw amounts are normalized by decimal precision using asset metadata and multiplied by end-of-day KAT prices. For Layer 1 settlement costs, the native ETH values are converted to USD using end-of-day ETH prices. The two components (Layer 1 settlement costs and incentives) are summed to calculate the total daily expenses for Katana Chain.

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

Total project operating and incentive expenses.

Expenses

Blockchains (L2)

The network uses pessimistic proofs via the AgglayerGateway for settlement on Ethereum, with vault bridges for cross-chain asset transfers.

Katana Network provides a scalable execution environment connected to Ethereum through the Agglayer interoperability layer.

Katana Chain

Expenses

Expenses

Chain breakdown