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Blockchains (L3)

# XAI Earnings Methodology

## 1. Overview

XAI earnings represents the net profitability of the XAI Layer 3 blockchain, calculated as total revenue minus total expenses on a daily basis. Revenue is generated from transaction fees paid by users on the XAI blockchain, while expenses consist of validator incentives distributed through the XAI staking and validation system. This metric provides insight into the economic viability and operational efficiency of the XAI blockchain ecosystem.

## 2. Data sources

The calculation relies on four primary data sources:

- **XAI blockchain transactions**: All transaction records from the XAI Layer 3 blockchain, including gas usage and pricing information for fee calculations
- **Arbitrum contract events**: Parsed `RewardsClaimed` and `BatchRewardsClaimed` events from the XAI Referee contract deployed on Arbitrum, capturing validator reward distributions
- **End-of-day price feeds**: Daily XAI token prices from CoinGecko (xai-blockchain) for USD conversion of both fees and incentives
- **Token metadata**: XAI token contract addresses and decimal configurations for proper amount calculations

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculates total daily revenue from XAI blockchain transaction fees
- **Logic**: Extracts all transactions from the XAI blockchain where users pay gas fees. For each transaction, calculates the gas fee by multiplying `gas_used_amount` by `gas_price` and dividing by 1e18 to convert from wei to XAI tokens. Groups transactions by day and sums all gas fees. Joins with daily XAI token prices to convert fee amounts from XAI tokens to USD values.
- **Key fields**: `gas_used_amount` (gas consumed), `gas_price` (price per gas unit), `block_timestamp` (transaction timing), `l3_gas_fee_amount` (calculated fee in XAI tokens)

### Component B: Expense calculation  
- **Purpose**: Calculates total daily expenses from validator incentive distributions
- **Logic**: Extracts reward distribution events from two sources on Arbitrum - individual `RewardsClaimed` events with `amount` field and batch `BatchRewardsClaimed` events with `totalReward` field. Both represent XAI tokens distributed to validators as staking rewards. Applies decimal correction using the standard macro to ensure proper token amount formatting. Groups events by day and sums all reward amounts. Joins with daily XAI token prices to convert reward amounts from XAI tokens to USD values.
- **Key fields**: `amount` (individual rewards), `totalReward` (batch rewards), `block_timestamp` (reward timing), token amounts after decimal correction

### Final aggregation
- **Combining components**: Joins daily revenue and expense totals by timestamp, ensuring both components have matching daily records
- **Currency conversion**: Both revenue and expenses are converted to USD using end-of-day XAI token prices from the same timestamp to maintain consistency
- **Time aggregation**: All calculations use daily boundaries with timestamp truncation to day level, ensuring complete 24-hour periods
- **Final calculation**: Subtracts total daily expenses from total daily revenue to determine net earnings, with zero-fill strategy applied to ensure complete time series without gaps for missing dates

*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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