# Chainflip Lending Liquidation volume Methodology

## 1. Overview

Liquidation volume is measured as the total USD value of debt covered in liquidations across all lending markets and chains. For Chainflip Lending, the total value of user loans that are repaid or settled through liquidation processes is captured. Liquidations are triggered when collateral thresholds are breached, resulting in the repayment of outstanding debt. This metric is utilized to assess the risk profile, collateral health, and overall stability of Chainflip Lending.

## 2. Data sources

- **Blockchain events**: `LoanCreated`, `LoanRepaid`, `LoanSettled`, and `CollateralAdded` events from `lendingPools` contracts, covering Chainflip Chain
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Loan and event classification

- **Purpose**: User loans are identified and relevant loan events are extracted.
- **Logic**: `LoanCreated` events from `lendingPools` contracts are parsed to identify active loans, with a filter applied to isolate user-initiated loans and exclude boost loans. Loan metadata, including the loan ID, asset, and borrower address, is mapped. Subsequent loan events, including `LoanRepaid`, `LoanSettled`, and `CollateralAdded` events, are extracted and associated with their respective loan IDs.
- **Key fields**: `loan_id`, `asset`, `loan_type`, `borrower_address`

### Component B: Liquidation identification

- **Purpose**: Loan repayments occurring as a result of liquidations are flagged.
- **Logic**: Repayments are identified from `LoanRepaid` events. A repayment is classified as a liquidation if the event is explicitly flagged as a liquidation, if the loan is settled via liquidation in the same block (indicated by a corresponding `LoanSettled` event), or if a `CollateralAdded` event representing system liquidation excess immediately follows the repayment event within the same block.
- **Key fields**: `is_liquidation_repay`, `is_liquidated`, `is_liquidation_excess`

### Component C: Volume aggregation and USD conversion

- **Purpose**: Liquidation volume is aggregated and converted to USD.
- **Logic**: The repaid amounts from flagged liquidation repayments are aggregated by day and asset. These raw amounts are normalized by decimal precision using asset metadata and multiplied by end-of-day asset prices to determine the USD value. Missing days are zero-filled to ensure continuous daily granularity.
- **Key fields**: `amount_raw`, `price_usd`, `decimals`

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

USD value of debt covered or positions force-closed in liquidations.

Liquidation volume

Lending

Chainflip operates a decentralized network of 150 validators that collectively control multi-chain vaults using threshold signature schemes (TSS). The protocol uses a Just-In-Time (JIT) AMM where liquidity providers compete to fill swap orders at the moment of execution, enabling capital-efficient cross-chain swaps. A portion of each swap fee is used to buy and burn FLIP tokens.

Chainflip is a decentralized cross-chain swap protocol that enables native asset exchanges across blockchains including Bitcoin, Ethereum, and Solana without wrapped tokens or traditional bridges. It was launched in 2023 by Chainflip Labs and uses a JIT AMM model combined with MPC-based vault technology to provide competitive pricing on cross-chain trades.

Chainflip is governed by its validator set and FLIP tokenholders. Validators stake FLIP to participate in the network and earn fees from swaps. The protocol is developed and maintained by Chainflip Labs.