Decouples execution, sequencing, and verification into specialized roles to maximize hardware utilization. Settles to Ethereum as an L2. Run via a single sequencer model with stateless validation. Uses an EVM-compatible execution environment.

MegaETH is an Ethereum Layer 2 blockchain that targets 100,000+ transactions per second and sub-10ms block times. Its architecture separates sequencers, executors, and verifiers to maximize hardware efficiency and uses an in-memory state structure called SALT (Small Authentication Large Trie) to eliminate disk I/O during execution.

Founded by Shuyao Kong and Namik Muduroglu. MegaETH Labs leads protocol development; the network is intended to be operated by independent sequencers, executors, and verifiers.

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Blockchains (L2)

MegaETH

# MegaETH Earnings Methodology

## 1. Overview

Earnings measures the net value retained by MegaETH after subtracting all expenses from its revenue. Revenue is generated from transaction fees (comprising both L2 execution fees and L1 settlement fees), while expenses consist of cost of revenue (L1 settlement fees paid to Ethereum for data posting and anchoring) and token incentives. This metric is critical for assessing the on-chain profitability and economic sustainability of the MegaETH network.

## 2. Data sources

- **Blockchain events**: Transaction execution data, including gas usage, gas prices, and L1 fees from MegaETH transactions, covering MegaETH
- **External data**: End-of-day price feeds for the native gas asset (WETH)

## 3. Step-by-step calculation

### Component A: Revenue calculation

- **Purpose**: Calculate the total transaction fees collected by the network as protocol revenue
- **Logic**: Transaction fees are calculated as the sum of L2 execution fees and L1 settlement fees. L2 execution fees are derived by multiplying the gas used by the gas price for each transaction, while L1 settlement fees are extracted directly from the L1 fee receipt. Since the sequencer operates at cost with no validator or sequencer payouts, the supply-side fees are set to zero, meaning 100% of the collected fees are recognized as protocol revenue.
- **Key fields**: `gas_used`, `gas_price`, `l1_fee`

### Component B: Cost of revenue tracking

- **Purpose**: Calculate the expenses incurred from posting batch data to Ethereum
- **Logic**: Cost of revenue is defined as the L1 settlement fees paid to Ethereum for posting batch data to EigenDA and the L1 anchor. These fees are extracted directly from the L1 fee receipt of each transaction.
- **Key fields**: `l1_fee`

### Component C: Token incentives tracking

- **Purpose**: Capture KPI-gated MEGA emissions distributed to network participants
- **Logic**: ERC-20 `Transfer` events from the MEGA token contract (`0x28b7e77f82b25b95953825f1e3ea0e36c1c29861`) on the megaeth chain are filtered to those originating from the `MegaStakingProxy` contract (`0x42bfaaa203b8259270a1b5ef4576db6b8359daa1`). Daily MEGA amounts (18 decimals) are converted to USD via the end-of-day MEGA/USD price feed. See `token_incentives_methodology.md`.
- **Key fields**: `token_address`, `from_address`, `amount`

### Component D: Earnings calculation and USD conversion

- **Purpose**: Determine the net earnings and convert the values to USD
- **Logic**: Total expenses are calculated by summing the cost of revenue and token incentives. Earnings are then calculated by subtracting total expenses from protocol revenue. The resulting native asset amounts are normalized by decimal precision and multiplied by end-of-day price feeds for WETH to determine the USD value.
- **Key fields**: `revenue`, `expenses`, `earnings`

*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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Earnings

Earnings

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