Validators process transactions and receive fees from users (supply-side fees).

Terra is a smart contract platform for decentralized applications (a blockchain). Terra was founded by Daniel Shin and Do Kwon and launched in 2018. Terra Classic's stablecoin UST collapsed in 2022 due to a cryptocurrency equivalent of a bank run. Terra was forked shortly after, leading to the current Terra and its predecessor Terra Classic. This dashboard tracks the new Terra blockchain.

LUNA holders own and govern the protocol. They take a cut of the total transaction fees paid by users (revenue) that is then rewarded to contract owners (cost of revenue). Terra’s investors include Coinbase Ventures, Galaxy Digital, Pantera Capital, etc.

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Terra

# Terra Earnings Methodology

## 1. Overview

Terra earnings represents the net income generated by the Terra blockchain protocol, calculated as total revenue minus total expenses. This metric measures the protocol's profitability by subtracting both operational costs (set equal to revenue) and token incentive distributions from fee-based revenue. The calculation follows a standard business accounting approach where earnings = revenue - cost of revenue - token incentives.

## 2. Data sources

The Terra earnings calculation relies on several key data sources:

- **Terra blockchain event logs**: Parsed event attributes from Terra blockchain transactions containing fee payout information and reward distributions
- **Fee payout events**: Two types of fee-sharing events (`payout_feeshare` and `juno.feeshare.v1.FeePayoutEvent`) that contain JSON-structured fee payment data
- **Reward distribution events**: Terra `rewards` events that track uluna token distributions to validators and stakers
- **End-of-day price feeds**: CoinGecko price data for terra-luna-2 and usd-coin tokens to enable USD conversion
- **Transaction metadata**: Block timestamps and transaction hashes from Terra blockchain for temporal aggregation

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculates total fee-based revenue generated by the Terra protocol
- **Logic**: Extracts fee payout events from Terra blockchain event logs, focusing on two event types. For `payout_feeshare` events, parses JSON payouts to extract nested fee amounts from the `fees_paid` array. For `juno.feeshare.v1.FeePayoutEvent` events, directly extracts fee amounts from the JSON structure. Processes both `uluna` and `FDB` token denominations, applying appropriate decimal adjustments (dividing by 1e6). Converts native token amounts to USD using CoinGecko end-of-day prices, then aggregates total daily fee revenue across all transactions.
- **Key fields**: `block_timestamp` for temporal grouping, `attribute_value` containing JSON fee data, `amount` and `denom` fields extracted from payouts, `coingecko_id` for price lookup

### Component B: Cost of revenue calculation  
- **Purpose**: Represents operational costs associated with generating protocol revenue
- **Logic**: Sets cost of revenue equal to the total revenue amount, implementing a 100% cost structure model where all revenue is considered to have associated operational costs. This approach treats Terra's fee revenue as having equivalent operational expenses.
- **Key fields**: `revenue` amount copied directly as `cost_of_revenue`

### Component C: Token incentives calculation
- **Purpose**: Calculates the USD value of token rewards distributed to validators and stakers
- **Logic**: Filters Terra event logs for `rewards` events where the `attribute_key` equals "amount" and the `attribute_value` ends with "uluna". Extracts the numeric token amount by removing the "uluna" suffix, then divides by 10^6 to adjust for Terra's 6-decimal precision. Converts native uluna amounts to USD using CoinGecko end-of-day prices for terra-luna-2, then aggregates daily totals across all reward distribution transactions.
- **Key fields**: `attribute_value` containing uluna amounts, `block_timestamp` for daily grouping, converted USD amounts after price application

### Component D: Expenses calculation
- **Purpose**: Combines all protocol expenses into a single metric
- **Logic**: Sums the cost of revenue and token incentives components to create total expenses. Uses a union operation to combine both expense types, maintaining consistent timestamp and product identification fields across both components.
- **Key fields**: `expenses` representing the combined cost of revenue and token incentives amounts

### Final aggregation
- **Combining components**: Subtracts total expenses from revenue using the `calculate_earnings` macro, which performs the arithmetic: Revenue - Expenses = Earnings
- **Currency conversion**: All native Terra tokens (uluna, FDB) are converted to USD using CoinGecko end-of-day price feeds before aggregation
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with all transactions within a calendar day grouped together
- **Final calculation**: The earnings value equals daily fee revenue minus the sum of daily cost of revenue and daily token incentives, expressed in USD

*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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