# LayerZero V1 Cost of revenue Methodology

## 1. Overview

Cost of revenue is defined as the expenses incurred by a project when outsourcing core business operations to third-party service providers. For LayerZero V1, this metric is set to zero. All fees associated with cross-chain message verification and execution are classified as supply-side fees rather than protocol operating expenses. These fees are paid by users to compensate infrastructure providers, specifically Decentralized Verifier Networks (DVNs) and message executors, and are not recorded as a cost incurred against protocol revenue.

## 2. Data sources

- **None**: This metric is set to a constant value and does not consume blockchain events.

## 3. Step-by-step calculation

### Component A: Constant value assignment

- **Purpose**: To reflect the accounting classification of infrastructure costs as supply-side fees.
- **Logic**: A constant value of zero is assigned to the metric for all supported chains and timestamps. This is performed because payments to infrastructure participants, such as Decentralized Verifier Networks (DVNs) and executors, are treated as direct distributions from users to service providers. These costs are not captured as an expense of the LayerZero V1 protocol itself.

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

Expenses paid to third parties to deliver core service output.

Cost of revenue

Interoperability

LayerZero uses a decentralized network of Validator Nodes to facilitate secure and fast communication between different blockchains.

LayerZero allows users to send and receive messages between different blockchains, and to bridge tokens between different blockchains.

LayerZero is a cross-chain interoperability protocol that enables secure and fast communication between different blockchains.

LayerZero v1

Cost of revenue

Cost of revenue

Chain breakdown