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Fathom

# Fathom Liquidation volume Methodology

## 1. Overview

Liquidation volume measures the total USD value of debt covered in liquidations across all lending markets on Fathom Lending. Undercollateralized debt positions are liquidated by liquidators to maintain the overall solvency of the protocol. This metric is utilized to evaluate the risk management efficiency and liquidation activity of Fathom Lending during periods of market volatility.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Market identification

- **Purpose**: Active lending markets and associated assets on Fathom Lending are identified.
- **Logic**: Active lending markets are identified by parsing `ReserveInitialized` events from `LendingPoolConfigurator` contracts. The underlying asset addresses, debt token addresses, and collateral token addresses are mapped to establish a registry of active markets.
- **Key fields**: `underlying_token_address`, `atoken_address`, `vtoken_address`

### Component B: Liquidation event extraction

- **Purpose**: Individual liquidation events and the associated debt covered are captured.
- **Logic**: Liquidation events are extracted from `LiquidationCall` events emitted by `LendingPool` contracts. The debt asset address, collateral asset address, and the raw amount of debt covered are retrieved for each transaction. These events are joined with the market registry to verify the pool and asset details.
- **Key fields**: `debt_to_cover`, `debt_token_address`, `collateral_token_address`

### Component C: Decimal normalization and USD conversion

- **Purpose**: Raw liquidation amounts are normalized and converted to USD.
- **Logic**: Raw debt amounts are normalized by the decimal precision of the respective debt asset using asset metadata. The normalized debt amounts are then multiplied by the corresponding end-of-day asset prices to calculate the USD value of the liquidated debt.
- **Key fields**: `debt_to_cover`, `price_usd`

### Component D: Aggregation and zero-filling

- **Purpose**: Liquidation volume is aggregated to a daily granularity and a continuous time series is ensured.
- **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 volume.
- **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.

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Liquidation volume

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