# Concentrated Liquidity Trading volume Methodology

## 1. Overview

Trading volume measures the total value of trades executed on the Etherex Concentrated Liquidity platform. This metric captures the economic activity within liquidity pools where liquidity providers allocate capital across specific price ranges. Since trading fees are generated from this volume, the metric serves as a primary indicator of the protocol's ability to generate revenue for its participants.

## 2. Data sources

- **Blockchain events**: `Swap` events from `Pool` contracts, `PoolCreated` events from `Factory` contracts, and `SetPoolFeeProtocol` and `FeeAdjustment` events from `PoolFactory` contracts, covering Linea
- **External data**: End-of-day price feeds for assets traded within the pools

## 3. Step-by-step calculation

### Component A: Swap event extraction

- **Purpose**: Capture the raw quantity of assets exchanged in every trade.
- **Logic**: Trade data is parsed from `Swap` events emitted by `Pool` contracts. The absolute values of change for both assets in the pair (asset 0 and asset 1) are extracted to determine the gross amount of each asset involved in the swap. Each event is indexed by block timestamp and transaction hash to ensure unique identification of every trade.
- **Key fields**: `amount0`, `amount1`, and `pool_address`

### Component B: Pool metadata and fee configuration

- **Purpose**: Identify the assets involved and the relevant decimals for normalization.
- **Logic**: Metadata is retrieved from `PoolCreated` events emitted by `Factory` contracts to map pool addresses to their respective asset pairs. Decimal precision for each asset is sourced from asset metadata. Additionally, fee tiers and protocol fee splits are tracked using `SetPoolFeeProtocol` and `FeeAdjustment` events from `PoolFactory` contracts and `PoolCreated` events from `Factory` contracts to maintain accurate pool-level configurations over time.
- **Key fields**: `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`, and `fee_tier`

### Component C: USD valuation and manipulation filtering

- **Purpose**: Normalize trade values to USD and mitigate the impact of price manipulation.
- **Logic**: Quantities are normalized by decimal precision for each asset. The value of each trade is calculated by multiplying the normalized asset amounts by their respective end-of-day USD price feeds. To prevent skewed volume reporting due to price manipulation or illiquid assets, the lower USD value between the two sides of the trade is selected as the representative volume for that transaction.
- **Key fields**: `price_usd`

### Component D: Aggregation

- **Purpose**: Consolidate trade data into a single daily volume metric.
- **Logic**: Individual trade values are summed at a daily granularity. The data is grouped by chain and product to ensure the Concentrated Liquidity volume is distinct from other protocol versions. Results are finalized using UTC day boundaries with zero-filling applied to dates where no trading activity occurred.

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

Total value of spot trades executed on the exchange.

Trading volume

Concentrated Liquidity

Archived

Trading volume

Trading volume