Katana: Financials

Blockchain Financials

Network Revenue for Katana consists of Network REV (transaction fees), interest generated from the Vault Bridge, AUSD Yield, and COL Yield.

REV is a standardized metric that tracks blockchain value accrual generated by user activity. The metric tracks in-protocol transaction fees and any out-of-protocol tips that users pay for transaction execution. Therefore, it measures the monetary demand to transact on a blockchain.

In the case of Katana, there are no out-of-protocol tips. All REV is generated by in-protocol transaction fees, of which there are three types.

• L1 Fee: Covers the cost of submitting L2 transactions to Ethereum mainnet L1. It fluctuates based on Ethereum mainnet's network congestion.
• L2 Base Fee: The minimum fee required for a transaction to be included in a block, dependent on the Base's network congestion.
• L2 Priority Fee: An additional fee paid to prioritize a transaction within a block. Katana utilizes priority ordering, where higher-paying transactions are executed first, so priority fees enable sophisticated users to effectively bid for inclusion.

In addition to Network REV, Katana revenue is generated through:

• Vault Bridge: Assets bridged to Katana are deposited into low-risk yield bearing DeFi on Ethereum Mainnet which generates yield for the Katana network.
• AUSD Yield: AUSD, backed by US Treasuries, overnight reverse repos, and cash reserves, earns a yield which is directed to the Katana Foundation.
• COL Yield: Chain-owned liquidity gets deposited into Katana DeFi protocols where it earns a yield.

Katana Financials

Network Revenue

Network Revenue for Katana consists of Network REV (transaction fees), interest generated from the Vault Bridge, AUSD Yield, and COL Yield.

REV is a standardized metric that tracks blockchain value accrual generated by user activity. The metric tracks in-protocol transaction fees and any out-of-protocol tips that users pay for transaction execution. Therefore, it measures the monetary demand to transact on a blockchain.

In the case of Katana, there are no out-of-protocol tips. All REV is generated by in-protocol transaction fees, of which there are three types.

• L1 Fee: Covers the cost of submitting L2 transactions to Ethereum mainnet L1. It fluctuates based on Ethereum mainnet's network congestion.
• L2 Base Fee: The minimum fee required for a transaction to be included in a block, dependent on the Base's network congestion.
• L2 Priority Fee: An additional fee paid to prioritize a transaction within a block. Katana utilizes priority ordering, where higher-paying transactions are executed first, so priority fees enable sophisticated users to effectively bid for inclusion.

In addition to Network REV, Katana revenue is generated through:

• Vault Bridge: Assets bridged to Katana are deposited into low-risk yield bearing DeFi on Ethereum Mainnet which generates yield for the Katana network.
• AUSD Yield: AUSD, backed by US Treasuries, overnight reverse repos, and cash reserves, earns a yield which is directed to the Katana Foundation.
• COL Yield: Chain-owned liquidity gets deposited into Katana DeFi protocols where it earns a yield.

Operator Payments

The value paid to the infrastructure providers responsible for running the network, such as posting transaction data and stateroots to the L1.

• L1 Data: The sequencer batches L2 transactions, compresses them, and submits them to the L1 to ensure the transaction data is accessible for verification and dispute resolution. This category includes both the cost of L1 transactions and blobs.
• L1 Proofs: Cost to post ZK proofs.

Gross Profit

The value remaining after subtracting the Operator Payments from Network Revenue, measuring the efficiency of executing user transactions and securing the network.

Token Holder Income

The excess Revenue that accrues to token holders net of all Operator Payments and Other Expenses.

Income is utilized for Chain Owned Liquidity deployed across the core applications.