Liquidity providers deposit funds into Bancor and receive trading fees from traders (supply-side fees).

Bancor is a non-custodial exchange protocol built on Ethereum. Bancor was founded by Galia Benartzi, Guy Benartzi, Eyal Hertzog, & Yudi Levi and launched in 2016.

BNT tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). Bancor's investors include DeFiance Capital, ParaFi Capital, Mechanism Capital, etc.

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Bancor

# Bancor Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how efficiently Bancor's liquidity is being utilized by comparing daily trading volume to total value locked (TVL). This metric is calculated as trading volume divided by TVL, providing insight into capital efficiency and trading activity relative to available liquidity. A higher turnover indicates more active trading relative to the amount of capital locked in the protocol.

## 2. Data sources

- **Bancor trading events**: Parsed `BancorNetwork_TokensTraded` events from Bancor v2.1 and `Converter_Conversion` events from Bancor v3 on Ethereum
- **Transaction data**: Ethereum transaction records to identify users and transaction context
- **Protocol contracts**: Token balance changes across approximately 400 Bancor protocol contract addresses including liquidity pools, converters, and other protocol components
- **Token metadata**: Token decimals and symbols for proper amount calculation
- **End-of-day price feeds**: Daily closing prices for USD conversion of all tokens
- **Blockchain data**: Ethereum event logs and transaction traces

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculate daily trading volume across all Bancor protocol versions
- **Logic**: Extract trading events from two Bancor protocol versions - `BancorNetwork_TokensTraded` events from v2.1 and `Converter_Conversion` events from v3. Normalize native ETH addresses (0xeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee) to WETH addresses (0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2) for consistency. Join with Ethereum transaction data to identify user addresses and transaction context. Filter transactions starting from June 16, 2020.
- **Key fields**: `sourceToken`/`targetToken` addresses, `sourceAmount`/`targetAmount` values, `targetFeeAmount` for fees, transaction metadata including block timestamp and user address

### Component B: Volume USD conversion and aggregation
- **Purpose**: Convert token amounts to USD values and aggregate daily volumes
- **Logic**: Adjust token amounts for decimals using token metadata, then convert both sides of each trade to USD using end-of-day price feeds. Apply anti-manipulation protection by taking the minimum USD value between the two tokens in each trade pair. Aggregate all trades by day, maintaining transaction-level detail with hash and log index for deduplication.
- **Key fields**: Decimal-adjusted `token0_amount` and `token1_amount`, USD-converted values using `price_usd` from daily price feeds, final `trading_volume` as the minimum of both sides

### Component C: Protocol token balance tracking
- **Purpose**: Track token balance changes across all Bancor protocol contracts
- **Logic**: Monitor token balance changes across approximately 400 predefined Bancor protocol contract addresses using the token balance changes calculation. These addresses include various types of liquidity pools, converter contracts, and other protocol components across different Bancor versions. Track balance changes at the daily level for all tokens held by these contracts.
- **Key fields**: `account_address` for protocol contracts, `token_address` for tracked tokens, `balance` changes over time, daily `timestamp` boundaries

### Component D: TVL calculation from net deposits
- **Purpose**: Calculate total value locked by converting cumulative token balances to USD
- **Logic**: Calculate cumulative token balances over time for each contract-token pair, ensuring continuity by forward-filling missing values. Convert all positive token balances to USD using end-of-day price feeds. Sum all USD values across all protocol contracts and tokens to get total net deposits, which represents the TVL. Apply daily time boundaries and ensure no gaps in the time series.
- **Key fields**: Cumulative `balance` for each token, USD conversion using daily `price_usd`, final `net_deposits` amount representing TVL

### Final aggregation
- **Combining components**: The liquidity turnover calculation uses the `calculate_liquidity_turnover` macro to divide daily trading volume by daily TVL for the same time period
- **Currency conversion**: All amounts are converted to USD using end-of-day price feeds applied consistently across both trading volume and TVL calculations
- **Time aggregation**: Both components use daily time boundaries (timestamp truncated to day) to ensure alignment between trading volume and TVL measurements
- **Final calculation**: Liquidity turnover equals daily trading volume divided by daily TVL, providing a ratio that indicates how many times the locked capital is traded per day

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

Trading volume divided by total liquidity.

BancorBNT

Liquidity turnover

Liquidity turnover

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