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.

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# LayerZero Earnings Methodology

## 1. Overview

Earnings measures the net value retained by LayerZero V1 and LayerZero V2 after all expenses are subtracted from revenue. This metric reflects the onchain profitability of the protocol's cross-chain messaging infrastructure. Currently, earnings are zero because the protocol fee switch has not been activated and all infrastructure costs, including payments to Decentralized Verifier Networks (DVNs) and message executors, are classified as supply-side fees rather than protocol expenses.

## 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: Revenue tracking

- **Purpose**: Determine the portion of fees retained by the protocol.
- **Logic**: Revenue is hardcoded to zero. Although message fees are collected by the protocol to compensate infrastructure providers, the protocol fee switch is currently disabled, meaning no portion of these fees is retained as protocol-level revenue.

### Component B: Expense tracking

- **Purpose**: Identify operating costs and cost of revenue.
- **Logic**: Expenses are hardcoded to zero. All infrastructure-related payments for message verification and delivery are categorized as supply-side fees paid directly to Decentralized Verifier Networks (DVNs) and executors, which are excluded from the protocol expense calculation.

### Component C: Earnings aggregation

- **Purpose**: Calculate the final net value retained by the protocol.
- **Logic**: Earnings are calculated by subtracting total expenses from protocol revenue. Given that both revenue and expenses are currently set to zero, the final earnings value is zero across all supported chains and products.

*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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