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 Revenue Methodology

## 1. Overview

Polygon revenue represents the total value of base fees that are burned (destroyed) daily on the Polygon network. This metric measures the deflationary impact of Polygon's fee burning mechanism, where a portion of transaction fees is permanently removed from circulation rather than paid to validators. The calculation aggregates all burned base fees across daily transactions and converts the result to USD values.

## 2. Data sources

- **Polygon blockchain transaction records**: Individual transaction data including gas consumption and effective gas prices
- **Polygon blockchain block headers**: Block-level data containing base fee rates per block
- **End-of-day price feeds**: WPOL (Wrapped POL) token price data for USD conversion
- **Token metadata**: WPOL token information and contract address (0x0d500b1d8e8ef31e21c99d1db9a6444d3adf1270)

## 3. Step-by-step calculation

### Component A: Transaction fact extraction
- **Purpose**: Extract gas usage data from individual Polygon transactions
- **Logic**: Process raw Polygon transaction records to extract key transaction details including gas consumption, transaction hashes, block numbers, and timestamps. Apply decimal correction by dividing gas price values by 10^18 to convert from wei to standard token units. Filter for valid transactions and include business classification metadata
- **Key fields**: `gas_used` (gas consumed per transaction), `effective_gas_price` (actual gas price paid), `block_number` (for joining to block data), `block_timestamp` (for time aggregation)

### Component B: Block fact extraction  
- **Purpose**: Extract base fee rates from Polygon block headers
- **Logic**: Process raw Polygon block data to extract base fee information for each block. Apply decimal correction by dividing `base_fee_per_gas` values by 10^18 to convert from wei to standard token units. Include block numbers and timestamps for joining with transaction data
- **Key fields**: `base_fee_per_gas` (fee rate that gets burned per unit of gas), `block_number` (for joining to transaction data), `block_timestamp`

### Component C: Daily base fee aggregation
- **Purpose**: Calculate total burned base fees per day by combining transaction and block data
- **Logic**: Join transaction records to their corresponding block records using `block_number` as the key. For each transaction, multiply the `gas_used` by the `base_fee_per_gas` from the corresponding block to calculate the base fee amount for that specific transaction. Sum all individual transaction base fees within each day using daily timestamp truncation. This represents the total amount of WPOL tokens burned as base fees each day
- **Key fields**: `base_fee_amount` (daily sum of burned base fees in WPOL token units), `timestamp` (daily aggregation boundary)

### Final aggregation
- **Combining components**: The daily base fee amounts flow directly from the intermediate aggregation as the core revenue metric
- **Currency conversion**: Convert daily WPOL token amounts to USD using end-of-day WPOL price feeds, maintaining the relationship between burned token quantities and their USD values
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation to the day level
- **Final calculation**: The final revenue metric equals the sum of all burned base fees per day, converted to USD. Each day's revenue represents the total USD value of WPOL tokens permanently removed from circulation through the base fee burning mechanism

*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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