Zora: Financials

Zora Total Revenue

Zora is a consumer social application leveraging a blockchain, so the Total Revenue is driven by both the application's Platform Revenue and the blockchain's Network REV. Note, we currently only platform revenue after the migration to tokenized posts in early 2025. We will soon track the historical platform revenue from NFT trading.

Network REV: Real Economic Value is a standardized metric that tracks blockchain value accrual generated by user activity. REV consists of both in-protocol transaction fees and out-of-protocol tips that users pay for transaction execution, so it measures the monetary demand to transact onchain. As it pertains to Zora's Network REV, there are no out-of-protocol tips. All REV is generated by in-protocol transaction fees.

Platform Revenue: Zora is an onchain social network that initially used NFTs to empower creators to capture value through community. A recent upgrade migrated away from NFTs by tokenizing posts on the social platform with 1 billion supply tokens. Zora charges trading fees on activity in the platform, distributing the majority of fees back to users. Notably, the tokens are minted and traded on Base.

Zora Financials

Revenue

The total amount an ecosystem generates from operations before any operator payments are deducted.

• Network REV: Network REV (Real Economic Value) is the measure of user demand to transact on a blockchain. It consists of all transaction fees and out-of-protocol tips paid for transaction execution. In the case of Zora, there are no out-of-protocol tips, so 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 Zora's network congestion.
  • L2 Priority Fee: An additional fee paid to prioritize a transaction within a block. OP Stack chains like Zora rely on priority ordering, where higher paying transactions are executed first, so priority fees enable sophisticated users to effectively bid for inclusion.

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 Settlement and Other: A state root is a cryptographic hash representing the current state of the L2 blockchain. The state root is posted to the L1 to enable the L1 to verify the correctness of L2 state transitions, which is used to verify the legitimacy of the bridge withdrawal requests.

Gross Profit

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

Other Expenses

• Optimism Collective: As part of its membership in the Optimism Superchain, Zora has a revenue share agreement with the Optimism Collective. Zora contributes the greater of 2.5% of total sequencer revenue (Network REV) or 15% of its net onchain sequencer revenue (Network REV less L1 Operator Payments) to the Collective. This excludes any revenue generated by the consumer application.
• Zora Labs Take Rate: Under the current construction of Zora, all net income (after accounting for the Optimism Collective Fee) accrues to Zora Labs.

Token Holder Net Income

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

In the case of Zora, there is no Token Holder Net Income as there is no token related to Zora. Zora Labs is the beneficiary of any net income, as noted by the Zora Labs Take Rate in Other Expenses.