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# Etherex Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how frequently the total value locked (TVL) in Etherex pools is traded, calculated as the ratio of daily trading volume to daily TVL. This metric indicates the efficiency and activity level of liquidity in the protocol - higher turnover suggests more active trading relative to the amount of capital locked in pools.

## 2. Data sources

- **Blockchain events**: Parsed Linea blockchain events from Etherex V2 and V3 protocols including `Swap` events from trading pairs and pools, `Sync` events tracking V2 pair reserve changes, `Mint` events for V3 deposits, `Collect` events for V3 withdrawals, and `Flash` events for V3 flash loans
- **Pool creation events**: Parsed `PairCreated` and `PoolCreated` events from Etherex V2 and V3 factories to identify trading pairs and their token compositions
- **Fee configuration events**: Pool fee tier and fee split configuration events from Etherex factory contracts
- **Transaction data**: Linea transaction records for user address identification
- **External data**: End-of-day token price feeds for USD conversion and token metadata including decimal places and symbols

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculates daily trading volume across all Etherex pools in USD
- **Logic**: Extracts swap events from both V2 pairs (`Pair_Swap_event`) and V3 pools (`Pool_Swap_event`) on Linea. For V2 trades, token amount changes are calculated as `amountIn` minus `amountOut` for each token. For V3 trades, direct `amount0` and `amount1` values are used. Raw token amounts are normalized by dividing by 10^decimals using token metadata. To prevent price manipulation, USD values are calculated using the minimum of token0 USD value and token1 USD value for each trade. Daily volumes are aggregated by chain and product type
- **Key fields**: `token0_amount` and `token1_amount` (normalized token quantities), `fee_tier` (pool fee configuration), transaction identifiers for deduplication

### Component B: TVL calculation via asset flows
- **Purpose**: Calculates total value locked by tracking cumulative asset flows into and out of pools
- **Logic**: Combines asset flows from multiple sources. For V3 pools: deposits from `Mint` events (positive flow), withdrawals from `Collect` events (negative flow), trading impacts from `Swap` events, and flash loan fees calculated by multiplying flash loan amounts by pool fee tiers. For V2 pools: daily reserve changes calculated as current day reserves minus previous day reserves from `Sync` events. All flows are normalized by token decimals and converted to USD using end-of-day price feeds. Net deposits are accumulated to calculate TVL
- **Key fields**: `token0_amount` and `token1_amount` for each flow type, `reserve0_amount` and `reserve1_amount` for V2 pools, `fee_tier` for flash loan fee calculations

### Component C: Pool metadata integration
- **Purpose**: Provides token addresses, decimal places, and fee configurations for accurate calculations
- **Logic**: Trading pair metadata is extracted from factory creation events, linking pool addresses to their underlying token0 and token1 addresses. Token decimal information is joined from token metadata tables. Pool fee tiers and fee splits are tracked through factory configuration events, with historical changes applied to the correct time periods
- **Key fields**: `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`, `fee_tier`, `fee_split`

### Final aggregation
- **Combining components**: Trading volume and TVL are calculated independently for each day, then joined by timestamp and protocol identifiers (chain, product) to compute the turnover ratio
- **Currency conversion**: All token amounts are converted to USD using end-of-day token price feeds, with trading volume using the minimum of token0/token1 valuations to prevent manipulation
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, ensuring consistent daily snapshots for both volume and TVL
- **Final calculation**: Liquidity turnover equals daily trading volume divided by daily TVL, providing a ratio that indicates how many times the locked capital is traded per day. Missing days are filled with zero values to maintain time series continuity

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

Trading volume divided by total liquidity.

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