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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Blockchains (L1)

Tezos

# Tezos Expenses Methodology

## 1. Overview

Tezos expenses represents the daily USD value of XTZ tokens distributed as rewards by the Tezos blockchain protocol. This metric captures the protocol's operational costs in terms of token incentives paid out to validators, bakers, and other network participants. The calculation extracts cumulative rewards data from Tezos blockchain sources, converts it to daily increments, and converts to USD using market prices.

## 2. Data sources

- **Tezos blockchain rewards data**: Custom scraper that extracts cumulative XTZ rewards data directly from Tezos blockchain protocol sources
- **Token price feeds**: End-of-day CoinGecko price feeds for XTZ token USD conversion
- **Chain availability metadata**: Token Terminal's chain availability filters and data quality controls

## 3. Step-by-step calculation

### Component A: Raw rewards extraction
- **Purpose**: Extract and normalize cumulative XTZ rewards data from Tezos blockchain sources
- **Logic**: Raw cumulative rewards data is pulled from the Tezos scraper source, which tracks total rewards distributed by the protocol over time. The raw XTZ amounts are converted from blockchain units to decimal format by dividing by 10^6 (XTZ has 6 decimal places). Each record includes the timestamp, chain identifier, token symbol, CoinGecko ID, and cumulative reward amount.
- **Key fields**: `timestamp` for daily boundaries, `rewards` for cumulative XTZ amounts, `chain` set to 'tezos', `token_symbol` set to 'XTZ', `coingecko_id` for price lookup

### Component B: Cumulative to incremental conversion  
- **Purpose**: Convert cumulative rewards data to daily incremental values to measure daily expenses
- **Logic**: Since the source data contains cumulative totals, a LAG window function is applied to calculate daily increments. For each day, the previous day's cumulative amount is subtracted from the current day's amount to get the daily reward distribution. The first record (where no previous value exists) uses the full cumulative amount as the starting point.
- **Key fields**: `amount` represents daily incremental XTZ rewards after cumulative conversion, partitioned by `contract_name` and ordered by `daily_timestamp`

### Component C: USD conversion and standardization
- **Purpose**: Convert daily XTZ rewards to USD and apply Token Terminal's data standardization framework
- **Logic**: Daily XTZ reward amounts are converted to USD using end-of-day CoinGecko prices matched by the `coingecko_id` field and timestamp. The conversion uses Token Terminal's standard USD conversion macro which handles price lookups and currency transformation. Additional metadata fields are added including `business_line` set to 'Blockchain', `market_sector_id` as 'blockchains_l1', and `business_segment_id` as 'blockchain'.
- **Key fields**: `token_incentives` contains USD-converted daily rewards, along with standardized metadata fields for business categorization

### Final aggregation
- **Combining components**: The final expenses metric directly uses the USD-converted `token_incentives` value from the token incentives calculation, simply renaming it to `expenses` to align with Token Terminal's expense metric naming convention
- **Currency conversion**: USD conversion occurs using end-of-day CoinGecko prices matched to daily timestamps, ensuring consistent pricing across all calculations
- **Time aggregation**: Data is aggregated at daily boundaries with `timestamp_grain` set to 'day', using the original daily timestamp from the source data
- **Final calculation**: The final expenses value equals the daily USD value of XTZ tokens distributed as protocol rewards, calculated as daily incremental XTZ rewards multiplied by end-of-day USD price. Gap filling ensures continuous daily values using a 'fill_zeros' strategy, and chain availability filters ensure data quality compliance.

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

Total project operating and incentive expenses.

TezosXTZ

Expenses

Expenses

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