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.

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# Chainflip Liquidation volume Methodology

## 1. Overview

Liquidation volume measures the total USD value of debt covered in liquidations across all lending markets and chains. This metric is used to assess the risk management, health, and stability of Chainflip Lending. The total amount of outstanding debt repaid or settled through liquidation processes is captured, providing insight into protocol solvency and liquidation frequency during market volatility.

## 2. Data sources

- **Blockchain events**: `LoanCreated`, `LoanUpdated`, `InterestTaken`, `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 event parsing

- **Purpose**: Extract and parse loan-related events from the lending protocol
- **Logic**: Events are parsed from the `lendingPools` contracts. `LoanCreated`, `LoanUpdated`, `InterestTaken`, `LoanRepaid`, `LoanSettled`, and `CollateralAdded` events are processed to extract loan identifiers, asset types, and raw amounts. For `LoanRepaid` events, the repayment amount is extracted. For `CollateralAdded` events, excess liquidation events are identified when the event data contains system liquidation excess indicators. For `LoanSettled` events, liquidation status is determined based on the settlement parameters.
- **Key fields**: `loan_id`, `event_method`, `event_data`, `amount_raw`

### Component B: Liquidation flagging

- **Purpose**: Identify which loan repayments are associated with liquidation events
- **Logic**: Repayments are classified as liquidations if they meet at least one of three conditions. First, the `LoanRepaid` event explicitly contains a liquidation flag in its event data. Second, the loan is settled via liquidation within the same block, as indicated by a corresponding `LoanSettled` event. Third, a `CollateralAdded` event indicating system liquidation excess immediately follows the repayment event within the same block. Only repayments associated with user loans (excluding boost loans) are considered.
- **Key fields**: `is_liquidation_repay`, `is_liquidated`, `is_liquidation_excess`, `loan_type`

### Component C: USD conversion and aggregation

- **Purpose**: Normalize liquidation volumes and convert them to USD
- **Logic**: The raw liquidation repayment amounts are aggregated by day, asset, and product. These raw amounts are normalized by decimal precision using asset metadata. The normalized volumes are then multiplied by end-of-day asset prices to calculate the final liquidation volume in USD.
- **Key fields**: `liquidation_volume`, `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.

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Liquidation volume

Liquidation volume

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