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

Tezos is a smart contract platform for decentralized applications (a blockchain). Tezos was founded by Arthur Breitman & Kathleen Breitman etc. and launched in 2018.

XTZ holders own and govern the protocol. They currently do not take a cut of the total transaction fees paid by users (revenue).

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Tezos

# Tezos Earnings Methodology

## 1. Overview

Tezos earnings represents the protocol's net profit calculated as revenue minus expenses. In this framework, Tezos generates no protocol revenue, so earnings equals the negative of token incentives paid to validators and bakers. This metric tracks the daily cost of operating the Tezos network through its proof-of-stake consensus mechanism.

## 2. Data sources

- **Tezos blockchain rewards data**: Scraped data showing cumulative XTZ rewards distributed to validators and bakers over time
- **Tezos blockchain fees data**: Block-level fee data used for timestamp structure (fees themselves are not counted as revenue)
- **External price data**: End-of-day XTZ price feeds from CoinGecko for USD conversion

## 3. Step-by-step calculation

### Component A: Token incentives processing
- **Purpose**: Calculate daily XTZ token incentives paid to Tezos validators and bakers
- **Logic**: Extract cumulative rewards data from Tezos blockchain scraper. Since the raw data shows cumulative totals, use a LAG window function to calculate the daily incremental amounts by subtracting the previous day's cumulative total from the current day's total. Convert raw XTZ amounts to proper decimal representation by dividing by 10^6. Convert daily XTZ amounts to USD using end-of-day CoinGecko price feeds.
- **Key fields**: `rewards` (cumulative XTZ amounts), `amount` (daily incremental XTZ), `token_incentives` (USD value)

### Component B: Revenue calculation  
- **Purpose**: Determine protocol revenue for Tezos
- **Logic**: Set revenue to 0 for all time periods. While the system processes fee data for timestamp structure, these fees are not treated as protocol revenue in this calculation framework.
- **Key fields**: `revenue` (always 0)

### Component C: Expenses calculation
- **Purpose**: Calculate total protocol expenses
- **Logic**: Take the processed token incentives as the sole expense component. Token incentives represent the cost of operating the proof-of-stake network through rewards paid to validators and bakers.
- **Key fields**: `token_incentives` becomes `expenses`

### Final aggregation
- **Combining components**: Apply the standard earnings formula: earnings = revenue - expenses
- **Currency conversion**: All amounts converted to USD using end-of-day CoinGecko price feeds for XTZ
- **Time aggregation**: Data aggregated to daily boundaries using timestamp truncation
- **Final calculation**: Since revenue equals 0 and expenses equal token incentives, the final earnings equals negative token incentives (representing the daily operational cost of the network)

*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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Earnings

Earnings

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