# Polkadot Relay Chain Fees Methodology

## 1. Overview

The total value paid by users to execute transactions and secure block space on the Polkadot Relay Chain is measured by Fees. These payments are composed of base transaction fees and discretionary tips provided to block producers. The aggregate economic value generated by the core network infrastructure of the Polkadot ecosystem is reflected by this metric.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Transaction fee and tip extraction

- **Purpose**: Capture the total native asset value paid for network usage on the Polkadot Relay Chain.
- **Logic**: `TransactionFeePaid` events are parsed from the Polkadot Relay Chain. The base fee amount is extracted from the first data field of the event metadata, and the discretionary tip amount is extracted from the second data field. Both components are aggregated to determine the total native fee per extrinsic.
- **Key fields**: `amount` (base fee), `tip` (discretionary priority fee)

### Component B: Normalization and USD conversion

- **Purpose**: Normalize native fee values and convert them into a standardized fiat representation.
- **Logic**: Fee amounts are normalized by the native decimal precision of the DOT asset. The resulting values are multiplied by end-of-day DOT price feeds. Daily totals are calculated based on UTC day boundaries.
- **Key fields**: `block_timestamp` (timing), `price_usd` (valuation)

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

Blockchains (L1)

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 Relay Chain

Fees

Fees

Chain breakdown