# Aave V2 Active loans Methodology

## 1. Overview

Active loans measures the value of user deposits that are lent out to borrowers in Aave V2. The portion of deposits that borrowers have to pay interest on is tracked, which correlates with the lending project's ability to generate revenue. Outstanding variable and stable debt are aggregated across all supported markets to determine the total active loans. The metric is denominated in USD and calculated daily.

## 2. Data sources

- **Blockchain events**: `ReserveInitialized` events from `LendingPoolConfigurator` and `AMMLendingPoolConfigurator` contracts, `Mint` and `Burn` events from `VToken` and `AMMVToken` contracts, and `Mint` and `Burn` events from `SToken` contracts, covering Ethereum, Avalanche, and Polygon
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Aave V2 market registry and initialization

- **Purpose**: Identify and map active lending markets for Aave V2
- **Logic**: Lending markets are identified by parsing `ReserveInitialized` events from `LendingPoolConfigurator` and `AMMLendingPoolConfigurator` contracts. Each underlying asset is associated with its corresponding interest-bearing deposit asset (`aToken`), stable debt asset (`sToken`), and variable debt asset (`vToken`) through this mapping.
- **Key fields**: `underlying_token_address`, `atoken_address`, `stoken_address`, `vtoken_address`

### Component B: Aave V2 variable debt tracking

- **Purpose**: Calculate outstanding variable-rate debt
- **Logic**: Variable debt mint and burn actions are extracted from `Mint` and `Burn` events emitted by `VToken` and `AMMVToken` contracts. Each debt change is scaled by dividing the transaction amount by the variable borrow index at the time of the event. The scaled debt changes are cumulatively summed to track the total scaled debt. The total outstanding variable debt is then calculated by multiplying the cumulative scaled debt by the current variable borrow index, which accounts for accrued interest.
- **Key fields**: `amount`, `index_value`, `vtoken_address`

### Component C: Aave V2 stable debt tracking

- **Purpose**: Calculate outstanding stable-rate debt
- **Logic**: Stable debt is tracked using `Mint` and `Burn` events from `SToken` contracts. The total outstanding stable debt is extracted directly from the total supply field of the latest event for each stable debt asset.
- **Key fields**: `total_supply`, `stoken_address`

### Component D: USD conversion and aggregation

- **Purpose**: Combine debt components, normalize decimals, and convert to USD
- **Logic**: Variable and stable debt components are combined for each market. Daily changes in active loans are calculated and cumulatively summed to generate a continuous time series. Missing days are filled forward to ensure data continuity. Asset amounts are normalized by decimal precision and multiplied by end-of-day asset prices to convert the values to USD.
- **Key fields**: `active_loans`, `price_usd`, `timestamp`

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

Value of loans currently outstanding to borrowers.

Active loans

Lending

Lenders deposit funds into Aave and receive interest payments from borrowers (supply-side fees).

Aave is a non-custodial lending protocol built on Ethereum and other adjacent blockchains. Aave was founded by Stani Kulechov and launched in 2017.

AAVE tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue). Aave’s investors include ParaFi Capital, Framework Ventures, Three Arrows Capital, etc.

Aave V2

Active loans

Active loans

Chain breakdown