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Robinhood

# Robinhood Earnings Methodology

## 1. Overview

Earnings is measured as the net value retained by Robinhood Chain after all operating expenses and costs of revenue are subtracted from the total revenue. Revenue is generated from transaction gas fees paid by users on Robinhood Chain. Expenses are comprised of Layer 1 settlement fees paid to Ethereum and Arbitrum Expansion Program (AEP) license fees, while token incentives are set to zero. A comprehensive view of the on-chain profitability of the network is provided by this metric.

## 2. Data sources

- **Blockchain events**: Transaction execution data and native asset flows, covering Ethereum and Robinhood Chain
- **External data**: End-of-day price feeds for native assets

## 3. Step-by-step calculation

### Component A: Revenue (L2 Gas Fees) Calculation

- **Purpose**: Total revenue generated from transaction gas fees on Robinhood Chain is calculated.
- **Logic**: Gas fees are calculated by multiplying the gas used by the effective gas price for all transactions on Robinhood Chain. The daily gas fees are aggregated, normalized by decimal precision, and converted to USD using end-of-day price feeds.

### Component B: Cost of Revenue (L1 Settlement Fees) Calculation

- **Purpose**: The cost of settling transactions on Ethereum is calculated.
- **Logic**: Transactions sent by the designated batch poster address (`0xdaa526086787d9debe1d7f3ffdb1fe50cf8687f4`) on Ethereum are filtered. The settlement cost is calculated by multiplying the gas used by the gas price, adding the product of blob gas used and blob gas price, and normalizing the total. These daily settlement costs are aggregated and converted to USD.

### Component C: Cost of Revenue (AEP License Fees) Calculation

- **Purpose**: License fees paid to the Arbitrum Foundation under the Arbitrum Expansion Program (AEP) are calculated.
- **Logic**: Native asset flows for designated fee accounts (RewardDistributors) are tracked on Robinhood Chain. Net inflows are calculated by summing fee collection credits and subtracting refunds. A license fee rate of 10% is applied to these net inflows to determine the AEP license fee, which is then converted to USD.

### Component D: Total Expenses and Earnings Aggregation

- **Purpose**: All revenue and expense components are combined to calculate net earnings.
- **Logic**: Total expenses are calculated by summing the cost of revenue (L1 settlement fees and AEP license fees) and token incentives (which are set to zero). Earnings are then calculated by subtracting total expenses from total revenue.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

Robinhood

Earnings

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