Validators process transactions and receive fees from users (supply-side fees).

Kusama is a security & interoperability platform for blockchains and applications. Kusama was founded by Gavin Wood and launched in 2019.

KSM holders own and govern the protocol. They currently take a cut of the total transaction fees paid by users (revenue).

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Kusama

# Kusama Expenses Methodology

## 1. Overview

Kusama expenses represent the total cost to the protocol of securing the network through staking rewards distributed to validators and nominators. This metric captures the daily USD value of all KSM tokens issued as rewards for validating transactions and maintaining network security. The calculation treats staking rewards as protocol expenses since they represent the economic cost of maintaining network consensus through token inflation.

## 2. Data sources

- **Kusama blockchain events**: Raw event logs from the Kusama blockchain, specifically from the staking pallet containing reward distribution events
- **Token metadata**: KSM token specifications including decimal precision (12 decimals) and CoinGecko identifier
- **End-of-day price feeds**: CoinGecko price data for KSM token USD conversion

## 3. Step-by-step calculation

### Component A: Staking reward event extraction
- **Purpose**: Extract all staking rewards distributed on the Kusama network from blockchain event logs
- **Logic**: Query Kusama blockchain events filtering for staking pallet events. Handle two different event methods due to protocol evolution: `Rewarded` events (used from August 26, 2021 onwards) and legacy `Reward` events (used before August 26, 2021). The methodology accounts for schema changes at block 21570045 where the reward amount moved from the second to third position in the event data array. Extract reward amounts from the appropriate JSON position based on block number and timestamp, then convert from native blockchain units to human-readable KSM amounts by dividing by 1e12
- **Key fields**: `block_timestamp` for timing, `event_pallet` filtered to 'staking', `event_method` for 'Rewarded' or 'Reward', `event_data` array containing reward amounts, `amount` as the calculated reward value in KSM

### Component B: Daily aggregation and USD conversion  
- **Purpose**: Aggregate all daily staking rewards and convert to USD values
- **Logic**: Group all reward events by daily timestamp and sum the total KSM rewards distributed across the entire network. Apply business classification metadata including blockchain L1 category and business segment identifiers. Convert daily KSM reward totals to USD using end-of-day CoinGecko price feeds for the KSM token
- **Key fields**: `daily_timestamp` for time boundaries, `token_incentives` as the sum of daily KSM rewards, USD conversion through CoinGecko pricing integration

### Final aggregation
- **Combining components**: The daily aggregated staking rewards serve as the base expense calculation
- **Currency conversion**: KSM token amounts converted to USD using end-of-day CoinGecko price feeds matched by date
- **Time aggregation**: Daily boundaries based on block timestamps, with all rewards within each 24-hour period summed together
- **Final calculation**: Total daily expenses equal the USD value of all staking rewards distributed on that day, representing the protocol's cost for network security through validator and nominator incentivization

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

Total project operating and incentive expenses.

KusamaKSM

Expenses

Expenses

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