# Aave V3 Total value locked Methodology

## 1. Overview

Total value locked (TVL) is utilized to measure the total value of assets deposited in Aave V3. This metric is used as a primary indicator of the protocol's liquidity and capacity for generating borrowing fees. TVL is calculated as the sum of idle assets remaining in the lending pools and active loans outstanding. By aggregating these components, the total supply-side deposits made by users are represented.

## 2. Data sources

- **Blockchain events**: `ReserveInitialized` events from `LendingPoolConfigurator` and `PoolTokenLogic` contracts; ERC-20 `Transfer` events; `Supply` and `Withdraw` events from `SupplyLogic` contracts; `PostTotalShares` events from `Oracle` contracts; `TokenRebased` events from `stETH` contracts; `Mint` and `Burn` events from `VToken` and `SToken` contracts; `DiscountPercentUpdated` events from `GhoVToken` contracts; and `Borrow` and `Repay` events from `BorrowLogic` contracts, covering Ethereum, Arbitrum, Avalanche, Base, Aptos, and 11 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Market registry and mapping

- **Purpose**: Active Aave V3 lending markets are identified and mapped to their underlying assets, deposit tokens, and debt tokens.
- **Logic**: `ReserveInitialized` events from `LendingPoolConfigurator` contracts (for EVM chains) and `PoolTokenLogic` contracts (for Aptos) are parsed. The underlying asset address, `aToken` (deposit token) address, stable debt token (`sToken`) address, and variable debt token (`vToken`) address are extracted to establish the market registry. For Aptos, short-form addresses are normalized to full Move type addresses using a centralized token mapping.
- **Key fields**: `underlying_token_address`, `atoken_address`, `stoken_address`, `vtoken_address`

### Component B: Idle balance tracking for standard EVM assets

- **Purpose**: Idle (available) liquidity for standard assets on EVM chains is calculated.
- **Logic**: ERC-20 token transfers are tracked for each market's underlying asset. Inflows are captured from transfers where the recipient is the `aToken` address, and outflows are captured from transfers where the sender is the `aToken` address. Daily net flows are calculated as inflows minus outflows, and cumulative idle balances are generated by summing these net flows over time.
- **Key fields**: `token_address`, `to_address`, `from_address`, `amount`

### Component C: Idle balance tracking for rebasing assets

- **Purpose**: The idle balance of rebasing `stETH` deposits on Ethereum is calculated, accounting for daily rebases.
- **Logic**: ERC-20 token transfers for `stETH` to and from the `astETH` address are parsed to track raw share transfers. To account for daily rebases, `PostTotalShares` events from `Oracle` contracts and `TokenRebased` events from `stETH` contracts are parsed to extract the rebasing index. The cumulative share balance is multiplied by the latest rebasing index to determine the actual `stETH` balance.
- **Key fields**: `deposit_token_address`, `token_address`, `amount`, `index_value`

### Component D: Idle balance tracking for Aptos assets

- **Purpose**: Idle liquidity for assets deposited on Aptos is calculated.
- **Logic**: `Supply` and `Withdraw` events from `SupplyLogic` contracts are parsed. Inflows from supply events and outflows from withdrawal events are aggregated daily. Cumulative idle balances are calculated by summing these net flows over time, with the cumulative balance floored at zero to prevent temporary negative balances caused by interest accruals.
- **Key fields**: `reserve_address`, `amount`

### Component E: Active loans tracking for EVM variable debt

- **Purpose**: Outstanding variable debt on EVM chains is calculated.
- **Logic**: `Mint` and `Burn` events from `VToken` contracts are parsed. The raw debt changes are scaled to shares by dividing the amounts by the variable borrow index at the time of the event. The cumulative sum of scaled shares is calculated and then multiplied by the latest variable borrow index to determine the total outstanding variable debt, which includes accrued interest.
- **Key fields**: `vtoken_address`, `amount`, `index_value`

### Component F: Active loans tracking for EVM stable debt

- **Purpose**: Outstanding stable debt on EVM chains is calculated.
- **Logic**: `Mint` and `Burn` events from `SToken` contracts are parsed. The total supply of stable debt is tracked directly from the total supply field emitted in these events.
- **Key fields**: `stoken_address`, `total_supply`

### Component G: Active loans tracking with discount correction for GHO

- **Purpose**: Outstanding GHO variable debt on Ethereum is calculated, correcting for the stkAAVE interest discount.
- **Logic**: `Mint` and `Burn` events from `VToken` contracts for GHO are parsed. To correct for the stkAAVE interest discount, `DiscountPercentUpdated` events from `GhoVToken` contracts are parsed to forward-fill the active discount percentage for each user. The scaled debt changes are corrected by subtracting the discounted interest that was burned off-payload, and the corrected cumulative scaled debt is multiplied by the variable borrow index to determine the true outstanding GHO debt.
- **Key fields**: `vtoken_address`, `amount`, `balance_increase`, `discount_percent`, `variable_borrow_index`

### Component H: Active loans tracking for Aptos

- **Purpose**: Outstanding debt on Aptos is calculated.
- **Logic**: `Borrow` and `Repay` events from `BorrowLogic` contracts are parsed. Daily net borrow flows are calculated as borrows minus repays. Cumulative active loans are generated by summing these net flows over time, with the cumulative balance floored at zero.
- **Key fields**: `reserve_address`, `amount`

### Component I: Total value locked aggregation and USD conversion

- **Purpose**: Idle balances and active loans are combined, normalized by decimal precision, and converted to USD.
- **Logic**: For each lending market, the cumulative idle balance and cumulative active loans (variable and stable debt) are summed to represent total deposits. The asset balances are normalized by their respective decimal precision using asset metadata. The normalized balances are multiplied by end-of-day asset prices to convert the values to USD, and daily values are aggregated to establish a continuous daily time series.
- **Key fields**: `tvl`, `price_usd`, `decimals`

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

Total value locked (TVL)

Total value locked (TVL) — value deposited into the project's applications.

Total value locked

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 V3

Total value locked

Total value locked

Chain breakdown