Validators process & store the uploaded data and collect upload & storage fees from data uploaders (supply-side fees).

Swarm is a data storage network built on Gnosis. Swarm was founded by Viktor Tron, Jeffrey Wilcke and Daniel A. Nagy and launched in 2016.

BZZ tokenholders own and govern the protocol. They currently don’t take a cut of the fees paid by data uploaders.

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Swarm

# Swarm Earnings Methodology

## 1. Overview

Swarm earnings measures the net financial performance of the Swarm decentralized storage protocol by calculating earnings as revenue minus expenses. The metric tracks the protocol's token incentive expenses paid to redistribution winners while setting revenue to zero, resulting in negative earnings that represent the cost of operating the redistribution mechanism. This provides insight into the protocol's token incentive spending for maintaining its decentralized storage network.

## 2. Data sources

The calculation relies on several key data sources from the Swarm protocol's smart contracts on Gnosis chain:

- **Redistribution events**: Parsed `WinnerSelected` events from the Redistribution contract on Gnosis chain that identify redistribution lottery winners
- **Token transfer events**: BZZ token transfer records from Gnosis chain showing movements from the PostageStamp contract to redistribution winners  
- **PostageStamp events**: Parsed `BatchCreated` and `BatchTopUp` events from the PostageStamp contract on Gnosis chain (captured but not used in earnings calculation)
- **External price data**: End-of-day BZZ token price feeds for USD conversion
- **Token metadata**: BZZ token contract details including decimal precision (18 decimals)

## 3. Step-by-step calculation

### Component A: Winner transaction identification
- **Purpose**: Identifies blockchain transactions where redistribution winners were selected
- **Logic**: Extracts distinct transaction hashes from parsed `WinnerSelected` events emitted by the Redistribution contract on Gnosis chain. These events occur when the protocol selects winners in its redistribution lottery mechanism
- **Key fields**: `transaction_hash` uniquely identifies each redistribution winner selection transaction

### Component B: Reward transfer tracking  
- **Purpose**: Captures BZZ token rewards paid to redistribution winners
- **Logic**: Finds BZZ token transfers from the PostageStamp contract address `0x30d155478ef27ab32a1d578be7b84bc5988af381` to recipients, filtered to only include transfers that occurred within the winner selection transactions identified in Component A. Uses Gnosis chain token transfer events but maps to Ethereum chain for price calculation purposes
- **Key fields**: `value` contains the raw BZZ token amount transferred, `block_timestamp` provides the transfer timing, `transaction_hash` links to winner selection events

### Component C: Fee collection (not used in earnings)
- **Purpose**: Tracks postage stamp fees paid by users (collected but not counted as revenue)
- **Logic**: Aggregates BZZ token amounts from `BatchCreated` events (`totalAmount` field) and `BatchTopUp` events (`topupAmount` field) on the PostageStamp contract. These represent payments for storage capacity but are excluded from the earnings calculation since revenue is hardcoded to zero
- **Key fields**: `totalAmount` and `topupAmount` contain raw BZZ token fee payments

### Component D: Token incentive processing
- **Purpose**: Converts BZZ reward transfers into USD-denominated daily token incentives
- **Logic**: Takes reward transfer amounts from Component B, corrects for BZZ token's 18 decimal places, converts to USD using end-of-day price feeds, and aggregates by day. Maps the real chain from Gnosis to the chain identifier while using Ethereum BZZ token address for price lookups
- **Key fields**: `amount` (decimal-corrected BZZ amounts), `token_incentives` (USD-converted daily totals)

### Component E: Revenue calculation  
- **Purpose**: Sets protocol revenue to zero for all time periods
- **Logic**: Creates records matching the timestamp structure from fee data but hardcodes `revenue` to 0 for all entries. This reflects that postage stamp fees are not treated as protocol revenue in the current earnings model
- **Key fields**: `revenue` (always 0), `timestamp` (daily boundaries), `chain_id` (Gnosis)

### Component F: Expense aggregation
- **Purpose**: Treats token incentives as protocol expenses  
- **Logic**: Takes the daily USD-denominated token incentive amounts from Component D and relabels them as `expenses` for the earnings calculation
- **Key fields**: `expenses` (daily USD totals of BZZ rewards paid)

### Final aggregation
- **Combining components**: Earnings calculation uses the `calculate_earnings` macro which subtracts expenses from revenue: earnings = revenue - expenses = 0 - token_incentives = negative token_incentives
- **Currency conversion**: All BZZ token amounts are converted to USD using end-of-day price feeds, with decimal correction applied (dividing by 10^18 for BZZ's 18 decimal places)  
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with missing days forward-filled using zeros
- **Final calculation**: The metric represents the daily cost of token incentives paid to redistribution winners, expressed as negative earnings in USD. Since revenue is zero and expenses are positive, earnings are always negative or zero, showing the protocol's daily spending on its redistribution mechanism

*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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