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Unichain

# Unichain Earnings Methodology

## 1. Overview

Unichain earnings represents the net profit generated by the Unichain Layer 2 blockchain, calculated as revenue minus expenses. Since Unichain hasn't launched its UVN (Uniswap Validation Network) yet, all sequencer fees currently go to Uniswap Labs as operational costs. The calculation accounts for blockchain transaction fees as revenue, operational costs (equal to fees), and token incentives paid out through campaigns as expenses. The metric answers the business question: "What is Unichain's net financial performance after accounting for both operational costs and ecosystem incentives?"

## 2. Data sources

- **Unichain transaction records**: Complete transaction data from the Unichain blockchain including gas usage metrics, gas prices, L1 gas components, and fee scalars
- **Ethereum blockchain events**: Parsed `CampaignCreated` events from the Angle protocol's `Univ4MerklRouterOracle` contract on Ethereum, containing token incentive campaign specifications
- **End-of-day token price feeds**: Daily closing prices for ETH (for gas fee conversion) and various ERC-20 tokens (for incentive token conversion) 
- **Token metadata**: Decimal place specifications and contract addresses for proper token amount normalization

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculates total fees collected by Unichain from transaction processing
- **Logic**: Extract all Unichain transactions with their gas consumption details. For each transaction, calculate L2 gas fees by multiplying `gas_used` by `gas_price` and dividing by 1e18 for wei-to-ETH conversion. Calculate L1 gas fees by multiplying `l1_gas_used` by `l1_gas_price` and `l1_fee_scalar`, then dividing by 1e18. Sum the L1 and L2 components to get total transaction fees. Aggregate all transaction fees by day and convert from ETH to USD using end-of-day ETH price feeds
- **Key fields**: `gas_used`, `gas_price`, `l1_gas_used`, `l1_gas_price`, `l1_fee_scalar`, `block_timestamp`

### Component B: Cost of revenue calculation  
- **Purpose**: Represents operational costs of running the Unichain sequencer
- **Logic**: Since Unichain hasn't launched UVN yet, all sequencer fees go directly to Uniswap Labs as operational costs. Therefore, cost of revenue equals the total fees calculated in Component A. This 1:1 relationship reflects that Uniswap Labs currently absorbs all blockchain operational expenses
- **Key fields**: Uses the same fee amounts calculated in Component A

### Component C: Token incentives calculation
- **Purpose**: Calculates daily token incentives distributed through ecosystem campaigns
- **Logic**: Parse `CampaignCreated` events from Ethereum's Angle protocol to extract campaign parameters including reward token address, total campaign amount, start timestamp, and duration. Calculate daily distribution amounts by dividing total campaign amounts by duration in days. Generate a complete daily time series for each campaign period using date arrays. For overlapping campaigns, sum daily amounts across all active campaigns. Convert token amounts to USD using end-of-day price feeds and apply decimal corrections based on token metadata
- **Key fields**: `rewardToken`, `amount`, `startTimestamp`, `duration` from campaign events; `daily_amount` calculated field

### Component D: Total expenses calculation
- **Purpose**: Combines all operational costs and incentive payments
- **Logic**: Sum the cost of revenue from Component B with token incentives from Component C. This represents total cash outflow for Unichain operations including both blockchain infrastructure costs and ecosystem development spending
- **Key fields**: `cost_of_revenue`, `token_incentives`

### Final aggregation
- **Combining components**: Subtract total expenses (Component D) from revenue (Component A) to calculate net earnings
- **Currency conversion**: All monetary values are converted to USD using end-of-day price feeds, with ETH prices for gas fees and respective token prices for incentives
- **Time aggregation**: All calculations are performed at daily grain using timestamp truncation to day boundaries 
- **Final calculation**: Earnings = Revenue - Expenses = Fees - (Fees + Token Incentives) = -Token Incentives, meaning Unichain currently operates at a loss equal to its token incentive spending since operational costs consume all fee revenue

*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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