Liquidity providers deposit funds into Balancer and receive trading fees from traders (supply-side fees). In addition, Balancer provides liquidity providers with additional yield using boosted pools.

Balancer is a non-custodial exchange protocol built on Ethereum. Balancer was founded by Fernando Martinelli and launched in 2018.

BAL tokenholders own and govern the protocol. They currently take a cut of the total trading and yield fees (revenue). Balancer's investors include DeFiance Capital, Three Arrows Capital, Alameda Research, etc.

governance

github

twitter

discord

etherscan

website

Exchanges (DEX)

Balancer

# Balancer Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how efficiently Balancer's total value locked (TVL) is being utilized for trading activity. It is calculated as the ratio of daily trading volume to TVL, expressing how many times the locked liquidity "turns over" through trading activity each day. This metric indicates the efficiency and utilization of capital locked in Balancer pools across supported blockchain networks.

## 2. Data sources

The calculation uses several types of blockchain and external data:

- **Balancer V2 Vault swap events**: Parsed `Swap` events from Balancer V2 Vault contracts across Ethereum, Arbitrum, Base, Avalanche, Gnosis, and Polygon networks
- **Pool creation events**: `PoolCreated` events from various Balancer V2 factory contracts including WeightedPoolFactory, ComposableStablePoolFactory, AaveLinearPoolFactory, and other specialized pool types
- **Fee configuration events**: `SwapFeePercentageChanged` events from individual pools and `SwapFeePercentageChanged` events from ProtocolFeesCollector contracts
- **Transaction data**: Blockchain transaction records containing user addresses and transaction metadata
- **Pool reserve snapshots**: Daily snapshots of token balances held in each Balancer pool
- **Token metadata**: Token symbols, decimal places, and other identifying information
- **End-of-day price feeds**: Daily USD price data for tokens to enable currency conversion

Note: All data excludes Optimism network activity, as Balancer's Optimism deployment is co-managed with Beethoven X and attributed separately.

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculate daily USD trading volume from swap activity across all Balancer pools
- **Logic**: Extract all `Swap` events from Balancer V2 Vault contracts, filtering out pool joins and exits by excluding swaps where either token address matches the pool address. For each swap, retrieve the `tokenIn`, `tokenOut`, `amountIn`, and `amountOut` values along with the pool identifier. Link swap events to blockchain transaction records to obtain user addresses. Convert raw token amounts to decimal-adjusted amounts using token metadata, then to USD values using end-of-day price feeds. To prevent manipulation, use the lesser USD value between the two tokens in each swap. Aggregate all swap volumes by day
- **Key fields**: `tokenIn` and `tokenOut` addresses, `amountIn` and `amountOut` raw values, `poolId` for pool identification, transaction metadata for user attribution

### Component B: Pool identification and classification  
- **Purpose**: Define valid Balancer trading pools and exclude LP tokens from TVL calculations
- **Logic**: Aggregate `PoolCreated` events from multiple factory contract types across supported chains to build a comprehensive registry of valid Balancer pools. This includes weighted pools, stable pools, linear pools, managed pools, and other specialized pool types. Use this registry to identify which token addresses represent pool tokens (BPTs) that should be excluded from TVL calculations to prevent double-counting
- **Key fields**: Pool addresses from `PoolCreated` events, factory contract addresses, chain identifiers

### Component C: Pool reserves and TVL calculation
- **Purpose**: Calculate total value locked by measuring token reserves across all pools
- **Logic**: Start with daily reserve snapshots that capture token balances for each pool. These snapshots use hourly data converted to daily boundaries by taking the first record of each day as the ending balance of the previous day. For each pool and token combination, adjust raw reserve amounts using token decimal metadata, then convert to USD using end-of-day price feeds. Exclude LP tokens by filtering out reserves where the token address matches any pool address from the pool registry. Sum all USD-denominated reserves across pools and chains to calculate total TVL
- **Key fields**: Pool addresses, token addresses, `reserve` amounts, timestamp boundaries for daily aggregation

### Component D: Fee tier integration
- **Purpose**: Capture trading fee information for potential fee-related analysis
- **Logic**: Track fee tier changes through `SwapFeePercentageChanged` events from individual pools and protocol-level fee updates from ProtocolFeesCollector contracts. Join fee information to trading volume data using event ordering to apply the correct fee rates to each swap. Convert fee percentages from basis points to decimal format by dividing by 10^18
- **Key fields**: `swapFeePercentage` values from fee change events, event ordering for temporal matching

### Final aggregation
- **Combining components**: Join daily trading volume totals with daily TVL totals by timestamp, ensuring both metrics use consistent daily boundaries and currency conversion methodologies
- **Currency conversion**: Apply end-of-day USD prices consistently across both trading volume and TVL calculations to ensure comparable metrics
- **Time aggregation**: Use daily timestamps truncated to day boundaries, with reserves converted from hourly to daily snapshots by taking the first hourly record as the previous day's ending balance
- **Final calculation**: Divide daily trading volume by daily TVL to calculate liquidity turnover ratio. Apply gap-filling with zeros for days with no trading activity and populate standardized project metadata fields including chain identifiers, business line classifications, and version information

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

Trading volume divided by total liquidity.

BalancerBAL

Liquidity turnover

Liquidity turnover

Competitive landscape