# dYdX V3 Total value locked Methodology

## 1. Overview

Total value locked (TVL) measures the total value of on-chain deposits made into dYdX V3. It represents the collateral held within the protocol's smart contracts to facilitate decentralized perpetual trading. TVL is utilized as a leading indicator for trading liquidity and revenue-generating potential, as these assets can be withdrawn by users at any time.

## 2. Data sources

- **Blockchain events**: ERC-20 token transfers and native asset transfers involving designated dYdX V3 smart contracts, covering Ethereum
- **External data**: End-of-day price feeds for deposited assets

## 3. Step-by-step calculation

### Component A: Token and native flow tracking

- **Purpose**: Capture the daily movement of assets into and out of dYdX V3 smart contracts.
- **Logic**: Inbound and outbound transfers are monitored for specific smart contract addresses on Ethereum. ERC-20 token transfers and native asset flows are aggregated to determine the net change in asset quantities for each day. Transactions are filtered to include only those interacting with the authorized escrow and vault addresses for the dYdX V3 product.
- **Key fields**: `timestamp`, `token_address`, `account_address`, `value`

### Component B: Cumulative balance calculation

- **Purpose**: Determine the total inventory of assets held by the protocol at any given time.
- **Logic**: A running sum is applied to the daily net flows (inflows minus outflows) to establish the total balance for each asset. A fill-forward mechanism is applied to these balances to ensure continuity across days where no transfer activity occurs. This ensures the protocol's inventory is accurately reflected for every timestamp.
- **Key fields**: `timestamp`, `token_address`, `balance`

### Component C: USD conversion and aggregation

- **Purpose**: Normalize asset balances into a common currency for total value reporting.
- **Logic**: Asset quantities are normalized by their respective decimal precision. These normalized balances are multiplied by end-of-day price feeds to determine the USD value of each asset held. The total value locked for dYdX V3 is then calculated by summing the USD values of all supported assets across the identified protocol contracts.
- **Key fields**: `timestamp`, `amount` (USD), `price_usd`

*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.

Total value locked

Exchanges (DEX)

Market makers offer trades through order book & make money on bid-ask spreads (supply-side fees).

dYdX is a non-custodial trading and derivatives protocol initially built on Ethereum and later expanded to their own blcokchain built on top of the Cosmos SDK. dYdX was founded by Antonio Juliano and launched in 2017.

DYDX tokenholders own and govern the protocol. dYdX Trading Inc. currently takes all of the total trading fees paid by traders (revenue). dYdX’s investors include a16z, Polychain, The Spartan Group, etc.

dYdX V3

Total value locked

Total value locked

Chain breakdown