Revenue
Author
@paulapivat (paul_apivat#3817)
Description
The traditional definition of revenue is money generated from normal business operations, calculated as the average sales price multiplied by the number of units sold [1]. For a service-business, revenue could be the average hourly rate multiplied by billable hours for services rendered.
There is less consensus for web3 protocols and communities.
Token Terminal defines revenue as the share of fees that goes to the protocol’s treasury or directly to its token holders through a burn mechanism, where a burn mechanism is similar to a stock buyback because it decreases the amount of tokens in circulation [2].
Messari offers a definition more centered on yield [3][4]. For example, defining revenue for Convex Finance, Messari calculates total revenue as a combination of:
Yield generated and harvested from Curve LP pools
Yield generated and harvested from staked cvxCRV
Yield generated and harvested from staked CVX
Yield generated and harvested from locked CVX
Yield generated and harvested from Frax LP pools
Yield generated and harvested from cvxFXS/FXS liquidity pools.
References
Hayes, Adam (updated Jul 18, 2022) What is Revenue? Definition, Formula, Calculation and Example. Investorpedia URL: https://www.investopedia.com/terms/r/revenue.asp
Token Terminal URL: https://tokenterminal.com/terminal/metrics/revenue
Messari Dashboard. URL: https://messari.io/protocol/convex-finance
Messari Protocol Metrics Subgraph Methodology v1.1.2: https://github.com/messari/subgraphs/blob/master/subgraphs/convex-finance/README.md
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