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 Average transaction fee Methodology

## 1. Overview

The average transaction fee metric measures the mean cost in USD paid by users for transactions on the Polygon network on a daily basis. This metric is calculated by dividing the total transaction fees collected by the network each day by the total number of transactions processed that day. It provides insight into the cost efficiency of using the Polygon blockchain and helps track how transaction costs fluctuate over time.

## 2. Data sources

- **Polygon blockchain transaction records**: Complete transaction data including gas usage, effective gas prices, sender and recipient addresses, block timestamps, and transaction hashes
- **End-of-day token price feeds**: Daily USD price data for WPOL (Wrapped Polygon token at address `0x0d500b1d8e8ef31e21c99d1db9a6444d3adf1270`) used for currency conversion
- **Account label database**: Mapping of Polygon addresses to human-readable names and categories for transaction classification
- **Token metadata**: Information about token decimal places and formatting requirements

## 3. Step-by-step calculation

### Component A: Transaction fee calculation
- **Purpose**: Calculate the total USD value of transaction fees paid on Polygon each day
- **Logic**: Extract all Polygon transactions with their gas usage and effective gas price information. For each transaction, multiply the `gas_used` by the `effective_gas_price` to get the fee amount in native WPOL tokens. The gas price values are corrected for decimal places by dividing by 10^18 to convert from wei to WPOL. These individual transaction fees are then summed by day to get total daily fees. Finally, the daily fee totals are converted from WPOL to USD using end-of-day WPOL price feeds
- **Key fields**: `gas_used` (gas consumed by transaction), `effective_gas_price` (actual gas price paid), `block_timestamp` (transaction timing), `fee_amount` (calculated fee per transaction)

### Component B: Transaction count calculation  
- **Purpose**: Count the total number of unique transactions processed on Polygon each day
- **Logic**: Extract all Polygon transactions and count distinct transaction hashes grouped by day. Transactions are enriched with account labels by matching the `to_address` field against the account label database, replacing addresses with human-readable contract names where available. Unlabeled addresses are categorized as 'Unlabeled'. The transaction counts are aggregated daily and include metadata about the business segment (blockchain) and market sector (blockchains_l1)
- **Key fields**: `transaction_hash` (unique transaction identifier), `to_address` (transaction recipient), `contract_name` (human-readable label), `transaction_count` (daily count of distinct transactions)

### Final aggregation
- **Combining components**: The daily transaction fees (in USD) are joined with daily transaction counts using the date timestamp as the join key
- **Currency conversion**: All fees are converted to USD using end-of-day WPOL token prices, with proper decimal correction applied during the conversion process
- **Time aggregation**: Data is aggregated at daily boundaries using timestamp truncation to day level
- **Final calculation**: The average transaction fee is calculated using safe division of total daily fees by total daily transaction count. Safe division prevents division by zero errors and handles edge cases where no transactions occurred on a given day. Missing days are filled with zero values to ensure complete time series data

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

PolygonPOL

Average transaction fee

Average transaction fee

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