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Photon

# Photon Average revenue per user (ARPU) Methodology

## 1. Overview

Average Revenue Per User (ARPU) for Photon measures the average daily revenue generated per active user. This metric is calculated by dividing total daily revenue by the number of daily active users (DAU). ARPU provides insight into the monetization efficiency of the Photon protocol by showing how much revenue is generated per user interaction on average.

## 2. Data sources

The calculation relies on the following raw data sources:
- **Solana native transfers**: Native SOL transfer events on the Solana blockchain, specifically transfers directed to Photon's designated fee collection addresses
- **Transaction metadata**: Solana transaction records containing signer information and timestamps for identifying user activity
- **End-of-day price feeds**: Token price data for converting SOL amounts to USD values
- **Token metadata**: Information about SOL token decimals and contract addresses for proper amount normalization

## 3. Step-by-step calculation

### Component A: Fee collection and revenue calculation
- **Purpose**: Identifies and aggregates fee payments to calculate daily revenue
- **Logic**: The system identifies Solana native transfers where the recipient address matches Photon's fee collection address (`AVUCZyuT35YSuj4RH7fwiyPu82Djn2Hfg7y2ND2XcnZH`). Each transfer represents a fee payment from users of the Photon protocol. Raw transfer amounts are normalized by dividing by 1e9 to convert from lamports (the smallest SOL unit) to SOL tokens. These SOL amounts are then converted to USD using end-of-day price feeds. Daily revenue is calculated by summing all fee payments within each calendar day boundary.
- **Key fields**: `block_timestamp` for daily grouping, `transaction_signer` for user identification, `amount` for fee values, `to_address` for filtering to fee collection addresses

### Component B: Daily active user counting
- **Purpose**: Counts unique users who paid fees each day to determine the user base
- **Logic**: The same Solana native transfer data is used to identify active users. Each transfer's `transaction_signer` represents a user who interacted with and paid fees to the Photon protocol. Daily active users are calculated by counting distinct transaction signers within each calendar day. The system uses HyperLogLog aggregation to efficiently handle large-scale distinct counting while supporting multiple dimensional breakdowns (by chain, user type, product).
- **Key fields**: `transaction_signer` as the unique user identifier, `block_timestamp` for daily boundaries, `user_type` classified as 'Trader' for all fee-paying users

### Component C: Revenue aggregation and USD conversion
- **Purpose**: Converts SOL fee amounts to USD and aggregates by day
- **Logic**: Raw fee amounts are processed through decimal correction (dividing by 1e9) and USD conversion using end-of-day price feeds. The conversion uses SOL token metadata and price data to ensure accurate USD valuations. Daily revenue totals are calculated by summing all converted fee amounts within each calendar day. Gap filling ensures continuous daily data by inserting zero values for days with no fee activity.
- **Key fields**: `fees` representing the SOL amounts, `token_address` for SOL identification, `timestamp` truncated to daily boundaries

### Component D: User aggregation with HyperLogLog
- **Purpose**: Efficiently aggregates unique user counts across multiple dimensions
- **Logic**: Transaction signers are processed through HyperLogLog initialization and aggregation to support scalable distinct counting. The system creates multiple dimensional views including project-level totals, chain-level breakdowns, user-type breakdowns, and product-level breakdowns. HyperLogLog sketches are merged and extracted to produce final daily active user counts while maintaining statistical accuracy for large datasets.
- **Key fields**: `user_dau` containing the signer addresses, `hll` for HyperLogLog sketch storage, dimension fields for various breakdown levels

### Final aggregation
- **Combining components**: The revenue and user DAU metrics are joined by date and project identifier to create matched daily pairs
- **Currency conversion**: All revenue values are standardized to USD using end-of-day SOL price feeds, ensuring consistent monetary representation
- **Time aggregation**: Both metrics use identical daily boundary logic based on `timestamp_trunc` to ensure proper alignment
- **Final calculation**: ARPU is computed by dividing total daily revenue (in USD) by the daily active user count for each day. Days with zero users result in zero ARPU values through the gap filling strategy

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

Photon

Average revenue per user (ARPU)

Average revenue per user (ARPU)

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