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 Expenses Methodology

## 1. Overview

The KILT expenses metric measures the total daily USD value of token incentives paid out as staking rewards on the KILT parachain. This represents the protocol's token-based expenses for securing the network through validator rewards. The metric treats staking rewards as operational expenses since they represent tokens distributed to validators for network maintenance and security services.

## 2. Data sources

The calculation relies on the following data sources:
- **KILT parachain event logs**: Blockchain events from the KILT parachain, specifically `parachainStaking.Rewarded` events that record when staking rewards are distributed to validators
- **End-of-day price feeds**: CoinGecko price data for KILT tokens, using both `kilt-protocol` and `kilt-protocol-2` token identifiers to ensure comprehensive price coverage
- **KILT blockchain metadata**: Chain and product identification data for the KILT ecosystem

## 3. Step-by-step calculation

### Component A: Staking reward extraction
- **Purpose**: Extract and process raw staking reward amounts from KILT parachain events
- **Logic**: The system filters KILT parachain event logs for events where the pallet is `parachainStaking` and method is `Rewarded`. These events contain reward amounts in the second element of the event data array. The native token amounts are converted from their raw format by dividing by 1e15 to get the proper decimal representation. Each reward event is associated with its block timestamp and unique extrinsic identifier.
- **Key fields**: `block_timestamp` for timing, `extrinsic_id` for transaction identification, and `amount` representing the KILT token reward amount after decimal conversion

### Component B: Daily aggregation
- **Purpose**: Aggregate staking rewards by day and prepare for USD conversion
- **Logic**: The extracted reward amounts are grouped by day using timestamp truncation to daily boundaries. All rewards within each day are summed to get total daily token incentives. The data is labeled with chain identifier as `kilt`, product identifier as `Kilt Chain`, and timestamp grain as `day` for proper categorization in the metrics system.
- **Key fields**: `timestamp` truncated to daily boundaries, `timestamp_grain` set to day, `chain_id` as kilt, `product_id` as Kilt Chain, and `token_incentives` containing the summed daily KILT amounts

### Component C: USD conversion with dual price sources
- **Purpose**: Convert KILT token amounts to USD values using multiple price sources
- **Logic**: The daily KILT token amounts are converted to USD using end-of-day price feeds from CoinGecko. The system performs two separate USD conversions: one using the `kilt-protocol-2` token identifier and another using the `kilt-protocol` identifier. This dual approach ensures price data availability and accounts for potential differences in token representations or price feeds. Both conversions produce identical data structures with USD-denominated token incentive values.
- **Key fields**: Same dimensional fields as input (`timestamp`, `timestamp_grain`, `chain_id`, `product_id`) with `token_incentives` now representing USD values instead of native token amounts

### Component D: Price source consolidation
- **Purpose**: Combine results from both price feed sources into a unified dataset
- **Logic**: The USD-converted results from both CoinGecko token identifiers are combined using a union operation. This creates a comprehensive dataset that includes price data from both sources, providing redundancy and ensuring data availability even if one price source has gaps.
- **Key fields**: Maintains the same structure with `timestamp`, `timestamp_grain`, `chain_id`, `product_id`, and USD-denominated `token_incentives`

### Final aggregation
- **Combining components**: The unified USD-converted dataset is processed through metric finalization logic that applies a forward-fill strategy for any missing data points, ensuring continuous time series data
- **Currency conversion**: USD conversion occurs using end-of-day CoinGecko price feeds, with the conversion applied to daily aggregated native token amounts
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with all rewards within each calendar day summed together
- **Final calculation**: The token incentives values are semantically relabeled as expenses in the final model, representing the protocol's operational costs for network security. Chain availability filtering is applied to ensure only data from active chain periods is included in the final metric.

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

Total project operating and incentive expenses.

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