Liquidity providers deposit funds into Aerodrome and stake their LP tokens to receive AERO tokens in proportion to their share of the votes (token incentives).

Aerodrome is a non-custodial exchange protocol built on Base. Aerodrome was launched by the Velodrome team in 2023.

AERO tokenholders own and govern the protocol. They vote which pools they wish to earn trading fees from (revenue), while the pools' unstaked liquidity providers earn the remainder of the trading fees (supply-side fees).

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# Aerodrome Liquidity turnover Methodology

## 1. Overview

Liquidity turnover is defined as the ratio of trading volume to total liquidity on the decentralized exchange. The efficiency of deposited liquidity is evaluated by this metric across Stable Pools, Volatile Pools, and Slipstream. Greater capital efficiency is indicated by a higher liquidity turnover ratio, demonstrating that more trading volume is generated per dollar of total value locked (TVL).

## 2. Data sources

- **Blockchain events**: `Swap` and `Sync` events from `Pool` contracts, `Swap`, `Mint`, `Collect`, `CollectFees`, and `Flash` events from `CLPool` contracts, and `PoolCreated` events from `Factory` and `CLPoolFactory` contracts, covering Base and Arc
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Trading volume calculation

- **Purpose**: Calculate the daily USD volume of trades executed across all pools
- **Logic**: Trade events are parsed from `Pool` contracts for V1 and V2, and from `CLPool` contracts for Slipstream. For V1 and V2, the net change in asset amounts is calculated using the difference between incoming and outgoing swap amounts. For Slipstream, asset amounts are extracted directly from the swap events. Trading volumes are normalized by decimal precision using asset metadata, converted to USD using end-of-day price feeds, and aggregated daily. To prevent valuation anomalies, the trade value is determined by taking the lesser value of the two swap legs.
- **Key fields**: `block_timestamp`, `account_address`, `token0_amount`, `token1_amount`

### Component B: Total value locked (TVL) calculation

- **Purpose**: Calculate the daily USD value of assets held in the liquidity pools
- **Logic**: Liquidity balances are tracked based on the pool type. For Stable Pools and Volatile Pools, reserve balances are extracted from `Sync` events emitted by `Pool` contracts, with the daily delta calculated as the difference between the last reserve of the day and the previous day's reserve. For Slipstream, asset flows are calculated by aggregating deposits (`Mint` events), withdrawals (`Collect` and `CollectFees` events), trades (`Swap` events), and fees (`Flash` events) from `CLPool` contracts. Outlier pools, such as those containing `superOETHb`, are excluded via a pool denylist. Daily asset balances are normalized by decimal precision, converted to USD using end-of-day price feeds, and cumulatively summed with a zero-floor guard applied per pool.
- **Key fields**: `block_timestamp`, `account_address`, `reserve0_amount`, `reserve1_amount`, `token0_amount`, `token1_amount`

### Component C: Liquidity turnover calculation

- **Purpose**: Combine trading volume and TVL to determine capital efficiency
- **Logic**: Daily trading volume is divided by the daily total value locked (TVL) for each product. If either the trading volume or TVL is zero, the resulting liquidity turnover is set to null or zero-filled. The final metric is aggregated at the project level.
- **Key fields**: `trading_volume`, `tvl`

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

Trading volume divided by total liquidity.

AerodromeAERO

Liquidity turnover

Liquidity turnover

Competitive landscape