twitter

website

github

discord

Blockchains (L3)

# XAI Expenses Methodology

## 1. Overview

XAI expenses measures the daily USD value of token incentives distributed by the XAI protocol to validators as rewards. This metric represents the operational cost to XAI of maintaining its validator network through token-based incentive programs. The calculation aggregates validator reward distributions from XAI's Referee smart contract on Arbitrum, converts the XAI token amounts to USD, and presents them as daily expense totals.

## 2. Data sources

- **XAI protocol events**: Parsed `RewardsClaimed` and `BatchRewardsClaimed` events from the XAI Referee smart contract on Arbitrum blockchain
- **Token price data**: End-of-day XAI token price feeds for USD conversion
- **Token metadata**: XAI token decimal configuration for proper amount calculation

## 3. Step-by-step calculation

### Component A: Validator reward event extraction
- **Purpose**: Captures all XAI token rewards distributed to validators through the protocol's incentive system
- **Logic**: Extracts two types of reward events from the XAI Referee contract on Arbitrum. Individual reward claims are captured from `RewardsClaimed` events using the `amount` field. Batch reward distributions are captured from `BatchRewardsClaimed` events using the `totalReward` field. All events are filtered to include only those with block timestamps up to August 22, 2025. Each record is classified with chain identifier as 'arbitrum', market sector as 'blockchains_l3', and business segment as 'blockchain'. The XAI token contract address `0x4cb9a7ae498cedcbb5eae9f25736ae7d428c9d66` is applied to all records.
- **Key fields**: `block_timestamp`, `transaction_hash`, `log_index`, `amount` from individual events, `totalReward` from batch events

### Component B: Daily aggregation and USD conversion
- **Purpose**: Converts raw event-level token amounts to daily USD expense totals
- **Logic**: Groups validator reward events by day using timestamp truncation to daily boundaries. Maintains chain, market sector, and business segment classifications from the source events. Applies XAI token decimal correction to ensure proper token amount representation. Converts the corrected XAI token amounts to USD using end-of-day price feeds corresponding to each day's timestamp.
- **Key fields**: Daily `timestamp`, `chain_id`, `token_incentives` in native XAI tokens, USD-converted amounts

### Component C: Expenses metric finalization  
- **Purpose**: Reframes token incentives as protocol expenses and ensures data quality
- **Logic**: Takes the daily USD token incentive totals and treats them as expenses from the protocol's perspective. Applies a fill_zeros strategy to create a continuous daily time series, filling any gaps with zero values to indicate days with no validator rewards. Validates data integrity and applies standardized metric schema formatting.
- **Key fields**: Daily `timestamp`, `expenses` in USD, `chain_id`, `product_id`

### Final aggregation
- **Combining components**: Token incentive amounts flow directly from event extraction through daily aggregation to become expense values, maintaining the same USD amounts throughout
- **Currency conversion**: XAI token amounts are converted to USD using end-of-day exchange rates, with proper decimal correction applied before conversion
- **Time aggregation**: Events are aggregated using daily timestamp boundaries, with block timestamps truncated to day level
- **Final calculation**: The daily XAI expenses equal the sum of all USD-converted validator reward distributions for each day, with zero-filling applied to ensure complete daily coverage

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

Total project operating and incentive expenses.

XAIXAI

Archived

Expenses

Expenses

Competitive landscape

Chain breakdown