Gross Margin
Protocol revenue minus the direct costs required to generate that revenue, expressed as a percentage.
In-Depth Explanation
In DeFi, gross margin = (Revenue - Cost of Revenue) / Revenue. Costs might include liquidity incentives, LP payments, or infrastructure costs. A protocol earning $10M but paying $8M in emissions has a 20% gross margin. High gross margins indicate sustainable unit economics.
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Related Terms
Protocol Revenue
Fees collected by a protocol that accrue to the protocol itself or its tokenholders, rather than to liquidity providers or other participants.
Emissions
New tokens distributed by a protocol as incentives, typically to liquidity providers or users.
Unit Economics
The direct revenues and costs associated with a single unit of business activity.
More in Metrics
View all →Total Value Locked
TVLThe total value of crypto assets deposited in a DeFi protocol or across all of DeFi.
Protocol Revenue
Fees collected by a protocol that accrue to the protocol itself or its tokenholders, rather than to liquidity providers or other participants.
Take Rate
The percentage of transaction volume or fees that a protocol captures as revenue.
Fees
Total fees generated by activity on a protocol, regardless of who receives them.