Stacks miners batch users' transactions and receive fees from users (supply-side fees). Miners submit transactions to Bitcoin, paying a share of the transaction fees to Bitcoin miners.

Stacks is an smart contract platform for creating decentralized applications on Bitcoin (a blockchain). Stacks was founded by Muneeb Ali and Ryan Shea, and launched in 2021.

STX tokenholders own and govern the protocol. They currently do not take a cut of the total transaction fees paid by users (revenue). Stacks' investors include IOSG Ventures, The Spartan Group, Hashkey Exchange, etc.

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Stacks

# Stacks Earnings Methodology

## 1. Overview

Stacks earnings represents the net financial result of the Stacks protocol, calculated as revenue minus expenses. This metric measures the protocol's profitability from an economic perspective. For Stacks, revenue is zero since the protocol doesn't generate income (transaction fees go directly to miners via Proof of Transfer), while expenses consist entirely of token incentives (coinbase STX mints). The result is always negative, representing the net cost of operating the Stacks network through inflationary rewards. This follows the same economic model as Bitcoin.

## 2. Data sources

- **Stacks blockchain transaction data**: Coinbase and user transaction records containing reward amounts, fee amounts, block timestamps, and transaction types
- **CoinGecko price data**: Daily STX/USD price feeds using the CoinGecko identifier `blockstack`

## 3. Step-by-step calculation

### Component A: Block data processing
- **Purpose**: Extract and normalize Stacks coinbase reward information
- **Logic**: Stacks transaction data is processed to extract coinbase rewards. Coinbase reward amounts are converted from micro-STX to STX by dividing by 10^6. Block timestamps are truncated to day boundaries for daily aggregation.
- **Key fields**: coinbase reward amount (converted to STX), `block_timestamp` (truncated to day), `block_number`

### Component B: Price data aggregation
- **Purpose**: Provide daily STX prices for USD conversion
- **Logic**: STX prices are sourced from CoinGecko using the `blockstack` identifier and aggregated to daily level. Daily prices provide consistent exchange rates across all calculation components.
- **Key fields**: `timestamp` (daily), `price` (USD per STX)

### Component C: Token incentives calculation (expenses)
- **Purpose**: Calculate daily USD value of coinbase rewards paid to miners
- **Logic**: Daily coinbase rewards are calculated by joining Stacks block data with price data on matching dates. For each day, all coinbase rewards are summed and multiplied by the daily STX price to get USD value. This represents the total amount spent by the protocol on miner incentives through PoX consensus.
- **Key fields**: `token_incentives` (daily USD amount), `timestamp` (daily), `chain_id` (stacks)

### Component D: Revenue calculation
- **Purpose**: Define protocol revenue (set to zero for Stacks)
- **Logic**: Stacks protocol revenue is hardcoded to zero because transaction fees are paid directly to miners, not to the protocol. The protocol operates as a decentralized network without direct monetization, following the same model as Bitcoin.
- **Key fields**: `revenue` (always 0), `timestamp` (daily), `chain_id` (stacks)

### Component E: Expenses calculation
- **Purpose**: Aggregate all protocol expenses
- **Logic**: Stacks expenses consist entirely of token incentives (coinbase rewards). The expenses component takes token incentives data directly since there are no other expense categories.
- **Key fields**: `expenses` (equals token_incentives), `timestamp` (daily), `chain_id` (stacks)

### Final aggregation
- **Combining components**: Earnings are calculated using the formula: earnings = revenue - expenses. Since revenue is always 0 and expenses equal the daily token incentives, the result is always negative, representing the net cost of operating the Stacks network
- **Currency conversion**: All amounts are converted to USD using daily STX prices from CoinGecko
- **Time aggregation**: All data is aggregated to daily boundaries using timestamp truncation to day level
- **Final calculation**: Daily earnings = 0 (revenue) - token_incentives_USD (expenses), resulting in negative values representing the protocol's net operating cost through inflationary rewards to miners

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

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

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