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

Polygon is a smart contract platform for decentralized applications & interoperability platform for blockchains. Polygon was founded by Jaynti Kanani, Sandeep Nailwal & Anurag Arjun and launched in 2017.

MATIC holders own and govern the protocol. They currently take a cut of the total transaction fees paid by users (revenue). Polygon’s investors include Coinbase Ventures, ZBS Capital, MiH Ventures, etc.

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Polygon

# Polygon Fees Methodology

## 1. Overview

The Polygon fees metric measures the total transaction fees paid by users on the Polygon blockchain on a daily basis, expressed in USD. This metric quantifies the revenue generated by the Polygon network from gas fees, providing insight into network usage and economic activity. The calculation aggregates all transaction fees paid in MATIC tokens across all transactions on a given day, then converts the total to USD using WPOL token prices.

## 2. Data sources

The metric calculation relies on the following raw data sources:

- **Polygon blockchain transaction records**: Complete transaction data including gas usage metrics, effective gas prices, transaction hashes, block timestamps, and sender/recipient addresses
- **End-of-day WPOL token price feeds**: USD price data for Wrapped MATIC (WPOL) token at address `0x0d500b1d8e8ef31e21c99d1db9a6444d3adf1270`, used as the reference for converting MATIC fees to USD
- **Token metadata**: Contract information and decimal precision data for the WPOL token to ensure accurate price conversions

## 3. Step-by-step calculation

### Component A: Transaction data extraction
- **Purpose**: Extract all Polygon transactions with their gas fee information and normalize gas prices to MATIC units
- **Logic**: Pull all transaction records from the Polygon blockchain, including successful and failed transactions. For each transaction, capture the `gas_used` (actual gas consumed) and `effective_gas_price` (final gas price paid after EIP-1559 mechanics). Convert the `effective_gas_price` from wei units to MATIC by dividing by 10^18. Filter to distinct transactions to avoid double-counting and include metadata like transaction hash, block timestamp, and addresses.
- **Key fields**: `gas_used` (gas units consumed), `effective_gas_price` (gas price in MATIC after decimal correction), `block_timestamp` (for daily aggregation), `transaction_hash` (unique identifier)

### Component B: Daily fee aggregation  
- **Purpose**: Calculate the total fees paid on each day by summing individual transaction fees
- **Logic**: Group all transactions by day using timestamp truncation to daily boundaries. For each transaction, multiply `gas_used` by `effective_gas_price` to get the fee amount in MATIC. Sum these individual transaction fees across all transactions within each day to get the total daily fee amount in MATIC tokens.
- **Key fields**: `timestamp` (daily boundary), `fee_amount` (total daily fees in MATIC)

### Final aggregation
- **Combining components**: The daily fee amounts in MATIC are passed forward for currency conversion and metric standardization
- **Currency conversion**: Convert daily fee totals from MATIC to USD using end-of-day WPOL token prices. WPOL (Wrapped MATIC) is used as the price reference since it maintains a 1:1 peg with MATIC and has reliable price feeds
- **Time aggregation**: Data is aggregated to daily grain using timestamp truncation, with each day representing the sum of all transaction fees within that 24-hour period
- **Final calculation**: The final metric value represents the total USD value of all transaction fees paid on the Polygon network for each day, calculated as: sum of (transaction gas used × effective gas price in MATIC) × WPOL/USD price, with standardized formatting applied including zero-filling for days with missing data

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

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

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