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Blockchains (L2)

peaq

# peaq Earnings Methodology

## 1. Overview

Peaq earnings represents the protocol's net profit calculated as revenue minus expenses. This metric measures the financial performance of the Peaq blockchain by subtracting token incentive expenses from net protocol revenue. Revenue is derived from transaction fees collected from users, minus the portion allocated to supply-side participants (validators and delegators). Expenses consist of token incentives distributed to network participants through block rewards and staking rewards.

## 2. Data sources

The calculation utilizes the following raw data sources:
- **Peaq blockchain event logs**: Parsed events from the Peaq blockchain containing fee distributions and reward payments
- **Transaction fee events**: `TransactionFeesDistributed` events from the `blockReward` pallet containing base fee amounts
- **Block reward events**: `BlockRewardsDistributed` events from the `blockReward` pallet containing block reward distributions  
- **Staking reward events**: `Rewarded` events from the `paraStaking` pallet containing staking reward payments
- **End-of-day price feeds**: PEAQ token prices from CoinGecko for USD conversion
- **Protocol configuration**: Peaq tokenomics parameters specifying 40% fee allocation to supply-side participants

## 3. Step-by-step calculation

### Component A: Fee collection
- **Purpose**: Extracts total transaction fees collected by the protocol
- **Logic**: Processes `TransactionFeesDistributed` events from the `blockReward` pallet on the Peaq blockchain. Extracts the base fee amount from the first element of the event data JSON array. Converts amounts from 18-decimal blockchain format to standard units by dividing by 1e18. Aggregates daily totals by truncating timestamps to day boundaries.
- **Key fields**: `block_timestamp` for daily grouping, `event_data` array containing fee amounts, `amount` as the extracted and converted fee value

### Component B: Token incentives collection  
- **Purpose**: Aggregates all token incentives distributed to network participants
- **Logic**: Combines two types of rewards through a union operation. First, extracts block rewards from `BlockRewardsDistributed` events in the `blockReward` pallet, using the first element of the event data array. Second, extracts staking rewards from `Rewarded` events in the `paraStaking` pallet, using the second element of the event data array. Converts all amounts from 18-decimal format and aggregates by day.
- **Key fields**: `block_timestamp` for daily aggregation, `event_data` arrays containing reward amounts at different array positions, `amount` as the final converted reward value

### Component C: Revenue calculation
- **Purpose**: Calculates net protocol revenue after supply-side fee allocation
- **Logic**: Starts with total daily fees collected from users. Calculates supply-side fees as 40% of total fees, representing the portion allocated to validators and delegators according to Peaq tokenomics. Subtracts supply-side fees from total fees to determine net protocol revenue. Converts all amounts to USD using end-of-day PEAQ token prices from CoinGecko.
- **Key fields**: `fees` as total collected fees, `fees_supply_side` as validator/delegator allocation (fees × 0.4), `revenue` as the net protocol portion

### Component D: Expenses calculation
- **Purpose**: Determines total protocol expenses from token incentive distributions
- **Logic**: Uses the aggregated token incentives from Component B as the expense amount. Converts incentive amounts to USD using end-of-day PEAQ token prices. These represent the cost to the protocol of rewarding network participants for their services.
- **Key fields**: `token_incentives` from the incentives component, `expenses` as the USD-converted expense amount

### Final aggregation
- **Combining components**: Subtracts total expenses from total revenue on a daily basis to calculate net earnings
- **Currency conversion**: All native PEAQ token amounts are converted to USD using end-of-day price feeds from CoinGecko, with prices matched by date
- **Time aggregation**: All blockchain events are truncated to daily boundaries for consistent daily reporting
- **Final calculation**: Earnings equals revenue minus expenses, where revenue is net protocol fees (total fees minus 40% supply-side allocation) and expenses are total token incentives distributed to participants

*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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