Jurors receive arbitration fees for reviewing evidence and voting coherently on disputes (supply-side fees).

Kleros is a third party arbitration and dispute resolution system built on Ethereum and Gnosis. Kleros was founded by Federico Ast, Clémenet Lesaege and Nicolas Wagner, and was launched in 2019.

PNK tokenholders own and govern the protocol. They do not currently take a cut of the total fees taken by coherent jurors (revenue).

governance

github

twitter

discord

etherscan

website

Infrastructure

Kleros

# Kleros Earnings Methodology

## 1. Overview

Kleros earnings represents the net financial position of the Kleros decentralized arbitration protocol after accounting for token incentives distributed to participants. The metric calculates earnings as revenue minus expenses, where revenue is set to zero (indicating the protocol doesn't retain arbitration fees) and expenses consist of PNK token incentives paid to jurors and tag registry contributors. This results in a negative earnings value that reflects the protocol's token distribution to maintain network participation and governance.

## 2. Data sources

The calculation uses these underlying raw data sources:
- **Kleros protocol events**: Parsed `KlerosLiquid_TokenAndETHShift` events from Ethereum and Gnosis chains capturing arbitration fee flows in ETH, xDAI, and PNK tokens
- **Juror reward claims**: Ethereum `MerkleRedeem_Claimed` events recording when jurors claim PNK token incentives for dispute resolution participation
- **Tag registry incentives**: Gnosis chain token transfer events tracking PNK token distributions from the tag registry contract to contributors
- **End-of-day price feeds**: Token price data for USD conversion of PNK tokens and other assets
- **Token metadata**: Decimal precision and addressing information for accurate amount calculations

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Determines protocol revenue from arbitration services
- **Logic**: Revenue is explicitly set to zero for all records, indicating that Kleros protocol operates as a public good where arbitration fees are not retained as protocol revenue but flow through to network participants
- **Key fields**: All revenue values are set to `0`, with standard metadata fields for `timestamp`, `chain_id`, and `product_id`

### Component B: Juror incentives processing
- **Purpose**: Captures PNK token rewards distributed to jurors for participating in dispute resolution
- **Logic**: Processes `MerkleRedeem_Claimed` events from Ethereum blockchain where jurors claim accumulated PNK token rewards through a Merkle tree-based distribution system. Events are filtered to exclude removed/invalid transactions and extract the claimed token `balance` amount
- **Key fields**: `balance` field contains the PNK token amount claimed, with event metadata including `block_timestamp`, `transaction_hash`, and claiming address

### Component C: Tagging incentives processing
- **Purpose**: Tracks PNK token distributions to contributors who maintain the tag registry system
- **Logic**: Monitors token transfer events on Gnosis chain where PNK tokens are transferred from the tag registry contract (`0xd0e76cfaa8af741f3a8b107eca76d393f734daces`) to contributors. Filters transfers by specific token address and source contract to isolate tag registry rewards
- **Key fields**: `value` field contains transferred PNK amount, with transfer metadata including sender/receiver addresses and transaction details

### Component D: Token incentives aggregation
- **Purpose**: Combines all token incentive distributions into total protocol expenses
- **Logic**: Unions juror incentives and tagging incentives into a single dataset, standardizing fields across both sources. Applies daily timestamp truncation to group events by day and applies USD conversion using end-of-day price feeds with proper decimal adjustment for PNK tokens
- **Key fields**: `token_incentives` represents the USD value of distributed tokens, aggregated by `timestamp`, `chain_id`, and other dimensional attributes

### Component E: Expenses calculation
- **Purpose**: Transforms token incentives into protocol expenses
- **Logic**: Takes the aggregated token incentives from Component D and treats them as protocol expenses, since these represent outflows of value from the protocol to participants
- **Key fields**: `expenses` field equals the `token_incentives` value, maintaining the same dimensional structure

### Final aggregation
- **Combining components**: Revenue (always 0) and expenses (token incentives) are combined using the standard earnings formula
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds, with proper decimal adjustment for each token type
- **Time aggregation**: Data is aggregated to daily granularity using timestamp truncation, with all events within a day summed together
- **Final calculation**: Earnings equals revenue minus expenses, which simplifies to negative expenses since revenue is zero, resulting in negative values that represent the net cost of operating the Kleros network through token incentive distribution

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

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

KlerosPNK

Earnings

Earnings

Competitive landscape