Network participants process transactions and receive fees from users (supply-side fees).

Polkadot is a security & interoperability platform for blockchains and applications. Polkadot was founded by Gavin Wood and launched in 2020.

DOT holders own and govern the protocol. They currently take a cut of the total transaction fees paid by users (revenue). Polkadot’s investors include Polychain, IOSG Ventures, Hashkey, etc.

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Polkadot

# Polkadot Revenue Methodology

## 1. Overview

Polkadot revenue represents the protocol's net fee income after paying validators their share. This metric calculates revenue as total fees collected across the Polkadot ecosystem minus supply-side fees paid to validators. The calculation aggregates transaction fees from the Polkadot relay chain and all system parachains, includes coretime sales revenue, and accounts for the protocol's fee distribution mechanism where validators receive 20% of relay chain base fees plus all tips.

## 2. Data sources

- **Polkadot blockchain events**: Parsed `TransactionFeePaid` events from Polkadot relay chain and system parachains (AssetHub, BridgeHub, Collectives, People, CoreTime)
- **Coretime sales events**: `Purchased` and `Renewed` events from the CoreTime parachain broker pallet
- **Alternative fee token events**: `AssetTxFeePaid` events from AssetHub for fees paid in non-DOT assets
- **End-of-day price feeds**: DOT token prices for fee conversion to USD
- **Alternative token price feeds**: End-of-day prices for AssetHub fee tokens (USDC, USDT, MYTH) sourced through HydraDX
- **Token metadata**: Asset mapping data for AssetHub fee tokens including decimals and price source information

## 3. Step-by-step calculation

### Component A: Transaction fee collection
- **Purpose**: Extract base transaction fees and tips from all Polkadot chains
- **Logic**: Filter blockchain events for `TransactionFeePaid` method across Polkadot relay chain and system parachains. Parse the event data arrays to extract the fee amount from position 1 and tip amount from position 2. Convert amounts from native token decimals (DOT uses 10^10 decimals) to standard units. Each transaction generates both a base fee and an optional tip component.
- **Key fields**: `block_timestamp` for daily aggregation, `amount` for base transaction fees, `tip` for validator rewards, `chain` for price lookup

### Component B: Coretime sales revenue  
- **Purpose**: Capture revenue from computational resource sales on CoreTime parachain
- **Logic**: Extract `Purchased` events (new coretime acquisitions) and `Renewed` events (coretime extensions) from the CoreTime parachain broker pallet. Parse the payment amounts from the event data arrays - position 2 for purchases, position 1 for renewals. Convert from DOT decimals to standard units. These represent payments for computational cores that parachains purchase to execute transactions on the relay chain.
- **Key fields**: `amount` for coretime payment values, `block_timestamp` for daily aggregation

### Component C: AssetHub alternative fee processing
- **Purpose**: Handle fees paid in non-DOT tokens on AssetHub parachain
- **Logic**: Process `AssetTxFeePaid` events where users pay transaction fees using alternative assets like USDC or USDT. Map complex token identifiers from event data to recognizable symbols using predefined asset mapping. Join with HydraDX price data using mapped asset IDs to convert alternative token amounts to USD values. Apply token-specific decimal conversions based on asset metadata.
- **Key fields**: `token_id` from event data for asset identification, `amount` for fee values, `hydradx_asset_id` for price lookup

### Component D: USD conversion and aggregation
- **Purpose**: Standardize all fees to USD and aggregate by chain and date
- **Logic**: Join fee data with end-of-day price feeds using appropriate price sources. For relay chain and most parachains, multiply DOT amounts by DOT prices from Polkadot chain price data. For AssetHub alternative tokens, use pre-converted USD values from the alternative fee processing. Sum base fees and tips together for total fee amounts. Aggregate daily by chain and product identifiers.
- **Key fields**: `fees` as combined USD fee amounts, `timestamp` truncated to daily boundaries, `product_id` for chain identification

### Component E: Supply-side fee calculation
- **Purpose**: Calculate the portion of fees paid to validators (supply side)
- **Logic**: Apply Polkadot's fee distribution mechanism only to relay chain fees. Calculate supply-side fees as 20% of base relay chain fees plus 100% of all tips. Base fees use the formula: base amount × (1 - 0.8) = base amount × 0.2. Tips are included entirely in supply-side fees as they go directly to validators. System parachain fees have no supply-side component as they are retained entirely by the protocol.
- **Key fields**: `fees_supply_side` as validator payment amounts, limited to relay chain transactions only

### Final aggregation
- **Combining components**: Sum total fees from all chains and coretime sales, then subtract supply-side fees paid to validators. Union fees as positive values and supply-side fees as negative values to calculate net protocol revenue.
- **Currency conversion**: All amounts converted to USD using end-of-day price feeds matched by timestamp and appropriate chain/token identifiers
- **Time aggregation**: Daily aggregation using timestamp truncation to day boundaries, ensuring consistent daily reporting across all chains
- **Final calculation**: Revenue equals total ecosystem fees minus validator rewards, representing the protocol's net fee income retained by the treasury

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

fees * take_rate (illustrative — revenue is observed directly per project, not derived from take_rate)

Fee revenue retained after supply-side payouts. Before cost of revenue (e.g. L2 DA fees) and before operating expenses.

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Revenue

Revenue

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