# Fathom Lending Liquidation volume Methodology

## 1. Overview

Liquidation volume measures the total USD value of debt covered in liquidations across all lending markets for Fathom Lending. This metric is used to assess the health and stability of the lending protocol, as well as the frequency of liquidations during market volatility. By tracking the volume of debt repaid by liquidators to close undercollateralized positions, insights into risk management and protocol solvency are provided.

## 2. Data sources

- **Blockchain events**: `ReserveInitialized` events from `LendingPoolConfigurator` contracts and `LiquidationCall` events from `LendingPool` contracts, covering XDC Network
- **External data**: End-of-day price feeds and asset metadata for underlying debt assets

## 3. Step-by-step calculation

### Component A: Fathom Lending market identification

- **Purpose**: Identify active lending markets and their associated asset configurations
- **Logic**: `ReserveInitialized` events from `LendingPoolConfigurator` contracts are parsed to map underlying assets to their corresponding debt and collateral assets. This mapping is used to establish the universe of active markets for Fathom Lending.
- **Key fields**: `pool_address`, `underlying_token_address`, `atoken_address`, `vtoken_address`

### Component B: Fathom Lending liquidation event extraction

- **Purpose**: Capture liquidation transactions and the amount of debt covered
- **Logic**: `LiquidationCall` events from `LendingPool` contracts are parsed to identify liquidation transactions. These events are joined with the identified lending markets to extract the debt asset address and the raw debt amount covered by the liquidator.
- **Key fields**: `debt_token_address`, `debt_to_cover`

### Component C: Decimal normalization and USD conversion

- **Purpose**: Normalize raw debt amounts and convert them to USD
- **Logic**: Raw debt amounts are normalized by the decimal precision of the underlying debt asset using asset metadata. The normalized debt amounts are then multiplied by the end-of-day price of the respective debt asset to calculate the USD value of the covered debt.
- **Key fields**: `debt_to_cover`, `price_usd`

### Component D: Daily aggregation and finalization

- **Purpose**: Aggregate liquidation volume to a daily granularity and apply zero-filling
- **Logic**: The USD values of covered debt are aggregated by day, chain, and product. Missing days in the time series are filled with zeros to ensure a continuous daily record of liquidation activity.
- **Key fields**: `liquidation_volume`, `timestamp`

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

USD value of debt covered or positions force-closed in liquidations.

Liquidation volume

Lending