Liquidity providers deposit funds into Buffer Finance and receive trading fees from binary options traders (supply-side fees).

Buffer Finance is a non-custodial binary options exchange built on Arbitrum and Polygon. Buffer Finance was founded by an anonymous team and launched in 2021.

BFR token holders own and govern the protocol. They currently take a cut of the total trading fees paid by binary options traders (revenue).

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Derivative exchanges

Buffer Finance

# Buffer Finance Total value locked Methodology

## 1. Overview

Buffer Finance TVL measures the total value locked in Buffer Finance's derivatives trading protocol. Buffer Finance is a decentralized options trading platform that allows users to trade binary options on various assets. The TVL calculation tracks the cumulative value of tokens held in Buffer Finance's contract addresses across Arbitrum and Polygon networks, representing the total funds available for options trading and protocol operations.

## 2. Data sources

The calculation uses the following raw data sources:
- **Blockchain events**: Parsed token transfer events from Arbitrum and Polygon networks to track balance changes for specific Buffer Finance contract addresses
- **End-of-day price feeds**: Daily token price data used to convert token balances to USD values  
- **Token metadata**: Information about token symbols and decimal places for proper balance calculations
- **Contract addresses**: Specific Buffer Finance contract addresses monitored across chains - 3 contracts on Arbitrum (`0x6ec7b10bf7331794adaaf235cb47a2a292cd9c7e`, `0xae0628c88ec6c418b3f5c005f804e905f8123833`, `0xfd9f8841c471fcc55f5c09b8ad868bdc9edebde1`) and 1 contract on Polygon (`0x6fd5b386d8bed29b3b62c0856250cdd849b3564d`)

## 3. Step-by-step calculation

### Component A: Token balance change tracking
- **Purpose**: Monitor token balance changes for Buffer Finance contract addresses to track when funds enter or leave the protocol
- **Logic**: Parse token transfer events from Arbitrum and Polygon networks, filtering specifically for transactions involving Buffer Finance contract addresses. Calculate balance changes by analyzing inbound and outbound transfers for each contract address. Track balance changes at daily granularity with timestamp, chain identification, account address, token address, and balance change amount
- **Key fields**: `timestamp` for daily aggregation, `chain_id` for network identification, `account_address` for contract identification, `token_address` for asset tracking, `balance` for change amounts

### Component B: Cumulative balance calculation and USD conversion
- **Purpose**: Calculate running totals of token balances held in Buffer Finance contracts and convert to USD values
- **Logic**: Apply running sum calculations partitioned by timestamp grain, chain, account address, and token address to get cumulative balances over time. Use forward-filling logic to maintain continuous time series data for all token-contract combinations. Join with end-of-day price feeds to convert token balances to USD values using daily closing prices. Filter results to include only positive balance positions, excluding zero or negative balances
- **Key fields**: `balance` as cumulative token amounts, `amount` as USD-converted values, `price_usd` from price feeds

### Component C: Market classification and metric preparation  
- **Purpose**: Classify Buffer Finance activity within Token Terminal's market taxonomy and prepare data for final TVL calculation
- **Logic**: Categorize all Buffer Finance activity as derivatives market sector and option business segment, reflecting the protocol's focus on binary options trading. Set `product_id` as null since Buffer Finance is treated as a single product. Apply metric finalization logic to ensure proper schema compliance and data quality standards
- **Key fields**: `market_sector_id` as 'derivatives', `business_segment_id` as 'option', `net_deposits` as the USD value

### Final aggregation
- **Combining components**: The final TVL metric directly uses the net deposits calculation as the TVL value, since net deposits represent the total value held in Buffer Finance contracts
- **Currency conversion**: All token balances are converted to USD using end-of-day price feeds matched by timestamp, chain, and token address
- **Time aggregation**: Data is aggregated at daily granularity with forward-filling to ensure continuous time series
- **Final calculation**: TVL equals the sum of all positive USD-denominated token balances held across all monitored Buffer Finance contract addresses on Arbitrum and Polygon networks

*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.

Buffer FinanceBFR

Total value locked

Total value locked

Competitive landscape

Chain breakdown