Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Kilt is digital identity solution powered by Polkadot Relay chain.

KILT holders own and govern the protocol.

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Kilt

# Kilt Earnings Methodology

## 1. Overview

KILT earnings represents the net profit generated by the KILT parachain protocol, calculated as revenue minus expenses. Revenue consists of transaction fees collected from users, while expenses represent token incentives paid out as staking rewards. This metric answers whether the protocol is generating positive cash flow from its operations by comparing fee income against reward distributions.

## 2. Data sources

- **KILT parachain event logs**: Raw blockchain events from the KILT parachain containing transaction and staking data
- **Transaction fee events**: Parsed `TransactionFeePaid` events capturing fees and tips paid by users
- **Staking reward events**: Parsed `Rewarded` events from the `parachainStaking` pallet showing validator/delegator rewards
- **End-of-day price feeds**: CoinGecko price data for KILT token conversion to USD (using both `kilt-protocol-2` and `kilt-protocol` token identifiers)
- **KILT blockchain transaction data**: Transaction records and execution status for filtering successful transactions

## 3. Step-by-step calculation

### Component A: Revenue from transaction fees
- **Purpose**: Calculate daily revenue from transaction fees collected by the KILT protocol
- **Logic**: Extract all successful `TransactionFeePaid` events from KILT parachain event logs. Filter for events where the transaction was successful. Parse the fee `amount` and `tip` fields from the event data, converting from native KILT decimals (1e15) to standard token units by dividing by 1e15. Sum the base fee amount plus tip for each transaction. Aggregate these fee totals by day using timestamp truncation
- **Key fields**: `amount` (base transaction fee), `tip` (additional user tip), `block_timestamp` (for daily aggregation), `success` (transaction status filter)

### Component B: Expenses from token incentives  
- **Purpose**: Calculate daily expenses from staking rewards distributed to validators and delegators
- **Logic**: Extract all `Rewarded` events from the `parachainStaking` pallet in KILT parachain event logs. Parse the reward `amount` from the event data, converting from native KILT decimals (1e15) to standard token units. Sum all reward amounts by day using timestamp truncation. These staking rewards represent the protocol's expense for securing the network
- **Key fields**: `amount` (staking reward amount), `block_timestamp` (for daily aggregation), `event_pallet` (`parachainStaking`), `event_method` (`Rewarded`)

### USD conversion
- **Currency conversion**: Convert both fee revenue and staking reward expenses from KILT tokens to USD using end-of-day price feeds from CoinGecko. The conversion process attempts two different KILT token identifiers (`kilt-protocol-2` and `kilt-protocol`) and unions the results to handle potential token listing changes or data availability issues
- **Time alignment**: Use the same daily timestamp boundaries for both price lookup and transaction aggregation to ensure consistent valuation

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently, then combined using the earnings calculation formula
- **Final calculation**: Earnings equals revenue minus expenses, where revenue is the daily USD value of transaction fees collected, and expenses are the daily USD value of staking rewards distributed
- **Fill strategy**: Apply zero-filling for missing days to ensure continuous time series data, and apply chain availability filters to exclude periods when KILT chain data may be unreliable

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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