# dYdX V4 Notional trading volume Methodology

## 1. Overview

Notional trading volume measures the total value of derivative contracts executed on dYdX V4. This metric captures the economic throughput of the exchange and serves as a primary indicator of the protocol's capacity to generate trading fees. All trades on dYdX V4 are executed on the dYdX Chain, a standalone blockchain built using the Cosmos SDK.

## 2. Data sources

- **Blockchain events**: `match` events from the dYdX Chain `message_events` module
- **External data**: Asset metadata for decimal normalization

## 3. Step-by-step calculation

### Component A: Match event extraction

- **Purpose**: To identify and capture every trade executed on the dYdX V4 order book.
- **Logic**: Transactions are filtered for `match` events emitted by the dYdX Chain. For each match, the event attributes are parsed to extract the maker and taker subaccount identifiers, fee amounts, and quote balance deltas. The quote balance deltas represent the change in the USDC-denominated balance for both parties involved in the trade.
- **Key fields**: `maker_quote_balance_delta_quote_quantums`, `taker_quote_balance_delta_quote_quantums`, and `block_timestamp`.

### Component B: Trade volume determination

- **Purpose**: To calculate the specific notional value of each individual trade.
- **Logic**: The notional volume is determined by comparing the absolute values of the maker and taker quote balance deltas. The smaller of the two absolute values is selected as the representative volume for the trade match to ensure accuracy and prevent double-counting or discrepancies in order execution.
- **Key fields**: `order_volume`.

### Component C: Normalization and aggregation

- **Purpose**: To convert raw blockchain values into human-readable USD denominations and aggregate them by time.
- **Logic**: Trade volumes are recorded in quantums, which are USDC-denominated raw units. These amounts are normalized by decimal precision (specifically 6 decimals for USDC) to arrive at the USD value. The resulting values are aggregated into daily totals based on UTC day boundaries.
- **Key fields**: `notional_trading_volume`, `timestamp`.

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

Total USD value of derivative contracts executed on the protocol.

Notional trading volume

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 V4

Notional trading volume

Notional trading volume

Chain breakdown