# Polkadot Collectives Revenue Methodology

## 1. Overview

Revenue measures the total value of fees retained by the Polkadot treasury from transactions executed on Polkadot Collectives. As a system parachain, Polkadot Collectives directs 100% of its transaction fees and tips to the protocol treasury. These funds are utilized for the ongoing maintenance and governance of the network. Unlike the Polkadot Relay Chain, no portion of the fees generated on Polkadot Collectives is distributed to validators as supply-side fees.

## 2. Data sources

- **Blockchain events**: `TransactionFeePaid` events from Polkadot Collectives
- **External data**: End-of-day price feeds for the native DOT asset

## 3. Step-by-step calculation

### Component A: Fee extraction from Polkadot Collectives

- **Purpose**: Captures the total fees paid by users for on-chain collective activities.
- **Logic**: `TransactionFeePaid` events are parsed from the Polkadot Collectives environment. Both the base `amount` and the `tip` fields are extracted from the event data for every successful extrinsic. These components represent the total cost of resource consumption and priority processing on the parachain.
- **Key fields**: `amount` (base transaction fee) and `tip` (priority fee).

### Component B: Revenue allocation logic

- **Purpose**: Determines the share of fees retained by the protocol treasury.
- **Logic**: Revenue is calculated as the difference between total fees and supply-side fees. For Polkadot Collectives, supply-side fees are recognized as zero because the network does not allocate a portion of parachain-level transaction fees to validators. Consequently, 100% of the collected fees and tips are allocated to protocol revenue.
- **Key fields**: `revenue` (set equal to the sum of base fees and tips).

### Component C: USD conversion and aggregation

- **Purpose**: Normalizes native asset values into a standardized USD valuation.
- **Logic**: Native DOT amounts are normalized by decimal precision. These values are multiplied by the end-of-day price of DOT sourced from price feeds. The data is aggregated at a daily granularity following UTC day boundaries.

*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.

Revenue

Blockchains (L2)

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.

Polkadot Collectives

Revenue

Revenue

Chain breakdown