# Volatile Pools Total value locked Methodology

## 1. Overview

Total value locked (TVL) is calculated as a measure of the total value of assets deposited within the Volatile Pools of Aerodrome. This metric is utilized as a leading indicator for liquidity and trading capacity for Volatile Pools asset pairs on the platform. Asset balances are tracked dynamically to reflect deposits, withdrawals, and swaps within the liquidity pools. The accumulated balances are normalized and converted to USD to provide an institutional-grade representation of the protocol's locked capital.

## 2. Data sources

- **Blockchain events**: `PoolCreated` events from `Factory` contracts and `Sync` events from `Pool` contracts, covering Base
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Volatile Pools identification

- **Purpose**: Identify active trading pairs and classify them as Volatile Pools.
- **Logic**: `PoolCreated` events from `Factory` contracts are parsed to extract pool addresses, associated assets, and the Stable Pools pool flag. Pools where the Stable Pools flag is false are classified as Volatile Pools, while pools with the Stable Pools flag set to true are excluded from this product scope. Asset decimals are retrieved from asset metadata to enable normalization.
- **Key fields**: `pool` (pool address), `token0` (first asset address), `token1` (second asset address), `Stable Pools` (pool classification flag).

### Component B: Reserve tracking and delta calculation

- **Purpose**: Track asset balances and calculate daily reserve changes for Volatile Pools.
- **Logic**: `Sync` events from `Pool` contracts are parsed to extract reserve balances for both assets in each pool. The raw reserve amounts are normalized by decimal precision. The daily change in reserves is calculated by taking the difference between the last recorded reserve balance of the current day and the last recorded reserve balance of the preceding day.
- **Key fields**: `reserve0` (normalized reserve balance of token0), `reserve1` (normalized reserve balance of token1), `timestamp` (block timestamp).

### Component C: Outlier filtering and unpivoting

- **Purpose**: Exclude denylisted pools and restructure the data for asset-level aggregation.
- **Logic**: Daily reserve deltas are unpivoted from a wide format containing both assets to a long format representing one row per asset. Pools identified as liquidity outliers or containing problematic assets, such as `superOETHb`, are excluded using a pool denylist.
- **Key fields**: `pool_address` (pool identifier), `token_address` (asset identifier), `delta_tvl` (daily change in asset balance).

### Component D: Cumulative aggregation and zero-floor guard

- **Purpose**: Calculate cumulative asset balances with a safeguard against negative values.
- **Logic**: Daily asset deltas are aggregated and summed chronologically to compute the cumulative balance for each asset in each pool. A zero-floor guard is applied using a greatest-value function to ensure cumulative balances do not fall below zero. Missing daily entries are filled forward to maintain a continuous time series.
- **Key fields**: `tvl` (cumulative asset balance).

### Component E: USD conversion and finalization

- **Purpose**: Convert asset balances to USD and aggregate to the protocol level.
- **Logic**: Cumulative asset balances are multiplied by end-of-day asset prices. The USD values are then aggregated across all pools and assets to produce the final daily TVL metric for Volatile Pools. Chain availability filters are applied to align the data with approved reporting periods.
- **Key fields**: `tvl` (USD-denominated total value locked).

*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

Exchanges (DEX)

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).

Volatile Pools

Total value locked

Total value locked

Chain breakdown