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Blockchains (L1)

Plasma

# Plasma Earnings Methodology

## 1. Overview

Earnings represents the net profit generated by the Plasma blockchain protocol, calculated as total revenue minus total expenses. For Plasma, this metric captures the protocol's profitability from transaction fees after accounting for validator incentives. Currently, Plasma operates with only internal validators, making all gas fees protocol revenue, while expenses remain zero due to inactive external staking rewards.

## 2. Data sources

The calculation relies on several key data sources:

- **Plasma blockchain transaction data**: Individual transaction records containing gas usage, effective gas prices, sender/receiver addresses, and transaction metadata
- **Plasma blockchain block data**: Block-level information including base fee per gas values required for EIP-1559 fee model calculations  
- **End-of-day token price feeds**: Daily closing prices for the native XPL token to enable USD conversion
- **Token metadata**: Information about the native XPL token including contract address and symbol details

## 3. Step-by-step calculation

### Component A: Transaction data processing
- **Purpose**: Extract and standardize raw transaction data from the Plasma blockchain
- **Logic**: Process raw Plasma blockchain transactions to extract key fields including block timestamps, transaction hashes, gas usage amounts, effective gas prices, and participant addresses. Join this transaction data with corresponding block data to obtain base fee per gas values. The native token is identified with a hardcoded contract address and XPL symbol. All numeric values are safely cast to appropriate data types for downstream calculations.
- **Key fields**: `block_timestamp`, `gas_used`, `effective_gas_price`, `base_fee_per_gas`, `token_address`, `token_symbol`

### Component B: Gas fee calculation  
- **Purpose**: Calculate daily gas fees using the EIP-1559 fee model
- **Logic**: Compute base fees by multiplying gas used by base fee per gas, and priority fees by multiplying gas used by the difference between effective gas price and base fee per gas. Convert both fee components from wei to native token units by dividing by 1e18. Aggregate these calculations by day, token address, and chain to produce daily fee totals. Base fees represent fees that are permanently burned, while priority fees go to validators.
- **Key fields**: `base_fee` (gas_used * base_fee_per_gas / 1e18), `priority_fee` (gas_used * (effective_gas_price - base_fee_per_gas) / 1e18)

### Component C: Revenue calculation
- **Purpose**: Determine total protocol revenue from gas fees
- **Logic**: Sum base fees and priority fees to calculate total fees per day. Since Plasma currently operates with only internal validators controlled by the Plasma team, all gas fees are considered protocol revenue rather than supply-side payments. Base fees are permanently burned (clear protocol revenue), while priority fees go to internal validators (also protocol revenue). Convert the total fees to USD using end-of-day price feeds. Apply Token Terminal's standardization and gap-filling logic.
- **Key fields**: `fees` (base_fee + priority_fee), `revenue` (fees converted to USD)

### Component D: Expenses calculation
- **Purpose**: Calculate protocol expenses from validator incentives
- **Logic**: Currently set all token incentives and expenses to zero. While Plasma's tokenomics include 5% annual inflation for validator staking rewards, this inflation mechanism only activates when external validators and stake delegation go live. Since only 2 internal validators currently operate and no public staking data is available, no token incentive expenses are recorded. Apply the same time boundaries and standardization as revenue.
- **Key fields**: `token_incentives` (0), `expenses` (0)

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently using the same time boundaries and then combined through subtraction
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds applied to the native XPL token values
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation to the day level
- **Final calculation**: Earnings equals revenue minus expenses, which currently equals total gas fees since expenses are zero (Earnings = Revenue - Expenses = Total Fees - 0 = Total Fees)

*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

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