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Exchanges (DEX)

Blackhole

# Blackhole Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures the efficiency of liquidity utilization in Blackhole's decentralized exchange by calculating the ratio of daily trading volume to total value locked (TVL). This metric indicates how frequently the locked liquidity is being used for trading activities. The calculation follows the standard formula: Trading Volume ÷ TVL, where both components are measured in USD and calculated daily.

## 2. Data sources

The methodology relies on multiple types of Avalanche blockchain data:

- **Blackhole v2 trading events**: Parsed `Pair_Swap_event` logs from Blackhole v2 exchange contracts capturing token swaps
- **Blackhole v3 trading events**: Parsed `AlgebraPool_Swap_event` logs from Blackhole v3 exchange contracts capturing token swaps  
- **Blackhole v2 liquidity tracking**: Parsed `Pair_Sync_event` logs tracking reserve balance changes in v2 trading pairs
- **Blackhole v3 liquidity events**: Parsed `AlgebraPool_Mint_event` logs for liquidity deposits, `AlgebraPool_Collect_event` logs for liquidity withdrawals, and `AlgebraPool_Flash_event` logs for flash loan activities
- **Fee tracking**: Parsed `AlgebraPool_Fee_event` logs capturing fee tier updates for v3 pools
- **Trading pair creation**: Parsed `PairGenerator_PairCreated_event` logs for v2 pair creation and `AlgebraFactory_CustomPool_event` logs for v3 pool creation
- **Transaction data**: Avalanche transaction records for user address identification
- **Price feeds**: End-of-day token price feeds for USD conversion
- **Token metadata**: Token symbols and decimal specifications for amount normalization

## 3. Step-by-step calculation

### Component A: Trading volume calculation

- **Purpose**: Calculates daily USD trading volume across all Blackhole trading pairs
- **Logic**: Extracts swap events from both Blackhole v2 and v3 contracts on Avalanche. For v2 swaps, calculates net token amounts by taking the difference between `amount0In` minus `amount0Out` and `amount1In` minus `amount1Out` fields from `Pair_Swap_event` logs. For v3 swaps, directly uses `amount0` and `amount1` fields from `AlgebraPool_Swap_event` logs. Joins with Avalanche transaction records to identify user addresses. Aggregates all trades by day, trading pair, and transaction. Corrects token amounts by dividing by the appropriate decimal factor using token metadata. Converts both token amounts to USD using end-of-day price feeds, then takes the minimum USD value between the two tokens to prevent price manipulation. Sums across all trading pairs to get total daily trading volume.
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out` for v2 trades; `amount0`, `amount1` for v3 trades; `from_address` for user identification; `token0_decimals`, `token1_decimals` for decimal correction; `price_usd` for currency conversion

### Component B: TVL calculation via asset flows

- **Purpose**: Calculates total value locked by tracking all asset flows into and out of Blackhole liquidity pools
- **Logic**: For v2 pools, monitors reserve balance changes through `Pair_Sync_event` logs, calculating daily net changes by comparing consecutive `reserve0` and `reserve1` values. For v3 pools, combines four types of asset flows: deposits captured from `AlgebraPool_Mint_event` logs with positive `amount0` and `amount1` values; withdrawals from `AlgebraPool_Collect_event` logs with amounts treated as negative outflows; trading activity from swap events; and flash loan fees calculated by multiplying flash loan amounts from `AlgebraPool_Flash_event` logs by the corresponding fee tier from `AlgebraPool_Fee_event` logs. All flows are aggregated daily per trading pair. Token amounts are corrected for decimals and converted to USD using end-of-day price feeds. Net deposits are calculated by summing all positive and negative flows, representing the cumulative TVL for each day.
- **Key fields**: `reserve0`, `reserve1` for v2 reserve tracking; `amount0`, `amount1` for v3 deposit/withdrawal amounts; `fee` for fee tier calculation; `token0_decimals`, `token1_decimals` for decimal correction; `price_usd` for USD conversion

### Final aggregation

- **Combining components**: Trading volume and TVL are calculated independently using the same daily timestamp boundaries and then joined by date for the final calculation
- **Currency conversion**: Both trading volume and TVL are converted to USD using end-of-day token price feeds, ensuring consistent valuation timing across both metrics
- **Time aggregation**: All events are truncated to daily boundaries using the `timestamp_trunc` function, with all activity within a 24-hour period aggregated together
- **Final calculation**: Daily liquidity turnover is calculated by dividing the total daily trading volume by the TVL for the same day. The result represents how many times the locked liquidity was utilized for trading during that day. Missing values are filled with zeros to ensure complete time series data.

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

Trading volume divided by total liquidity.

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Liquidity turnover

Liquidity turnover

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