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Fathom

# Fathom Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how efficiently capital is being utilized by comparing daily trading activity to total value locked. It is calculated as the ratio of daily trading volume to TVL, indicating how many times the locked capital "turns over" through trading activity. A higher ratio suggests more efficient capital utilization and active trading relative to the capital base.

## 2. Data sources

The calculation uses several types of raw blockchain data from the XDC network:
- **DEX trading events**: Parsed `Pair_Swap_event` logs from Fathom DEX contracts containing trade amounts and participant details
- **Lending protocol events**: `VToken_Mint_event` and `VToken_Burn_event` logs from Fathom lending markets tracking borrowing activity
- **Stablecoin transfer events**: XDC token transfer logs for Fathom Dollar stablecoin tracking mint and burn operations
- **Liquidity pool events**: `Pair_Sync_event` logs from DEX contracts tracking reserve balance changes
- **Lending deposit tracking**: Token transfer events to and from aToken contract addresses representing lending market deposits and withdrawals
- **Market data**: End-of-day token price feeds for USD conversion
- **Token metadata**: Contract information including token decimals and symbols

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculate daily trading volume from Fathom DEX activity
- **Logic**: Extract trading data from DEX `Pair_Swap_event` logs on XDC, capturing the `amount0In`, `amount0Out`, `amount1In`, and `amount1Out` fields. Calculate net token amounts exchanged for each trade by taking the difference between in and out amounts. Join with trading pair metadata to get token decimal information and correct the raw amounts. Convert corrected amounts to USD by joining with end-of-day price feeds, prioritizing the bought token's price and falling back to the sold token's price if unavailable. Aggregate all USD trading volumes by day
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out` from swap events, `token0_address` and `token1_address` from pair creation events, token decimals from metadata

### Component B: TVL calculation - stablecoin supply
- **Purpose**: Track outstanding Fathom Dollar stablecoin supply as part of protocol TVL
- **Logic**: Monitor token transfer events for the Fathom Dollar stablecoin contract address `0x49d3f7543335cf38fa10889ccff10207e22110b5`. Identify mint events as transfers from the zero address and burn events as transfers to zero or dead addresses. Calculate daily net changes by summing mints and subtracting burns. Apply cumulative sum to get outstanding supply over time. Correct for token decimals and convert to USD using price feeds
- **Key fields**: `from_address`, `to_address`, `value` from token transfer events, with special handling for zero addresses

### Component C: TVL calculation - DEX liquidity
- **Purpose**: Calculate total value locked in Fathom DEX liquidity pools
- **Logic**: Track reserve changes using `Pair_Sync_event` logs that contain updated `reserve0` and `reserve1` amounts for each trading pair. Calculate daily changes in reserves by comparing current day reserves to previous day reserves for each pool. For pools with no activity, use the current reserve balance as the change. Correct reserve amounts for token decimals using trading pair metadata. Convert both token reserves to USD using end-of-day price feeds and sum them to get total pool TVL
- **Key fields**: `reserve0`, `reserve1` from sync events, `token0_address`, `token1_address` from pair metadata

### Component D: TVL calculation - lending market deposits
- **Purpose**: Track idle deposits in Fathom lending markets
- **Logic**: Monitor token transfers to and from aToken contract addresses to track lending market deposit and withdrawal flows. Inflows are transfers TO aToken addresses, outflows are transfers FROM aToken addresses. Calculate daily net flows by summing inflows and subtracting outflows for each market. Apply cumulative sum to get outstanding idle deposits over time. Correct for token decimals and convert to USD using price feeds
- **Key fields**: `to_address`, `from_address`, `value` from token transfers, with aToken addresses as key identifiers

### Component E: TVL calculation - active loans
- **Purpose**: Track outstanding borrowings as part of total protocol TVL
- **Logic**: Monitor variable debt token mint and burn events from Fathom lending markets. Mint events (`VToken_Mint_event`) represent new borrows, burn events (`VToken_Burn_event`) represent repayments. Calculate daily net borrowing by summing mints and subtracting burns for each market. Apply cumulative sum to get outstanding loan balances over time. Correct for token decimals and convert to USD using price feeds
- **Key fields**: `value` from mint/burn events, `vtoken_address` to identify specific lending markets

### Final aggregation
- **Combining components**: Sum all TVL components (stablecoin supply, DEX liquidity, lending deposits, and active loans) to get total protocol TVL for each day
- **Currency conversion**: All components are converted to USD using end-of-day price feeds matched by timestamp, token address, and chain
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with forward-filling applied to handle days with no activity
- **Final calculation**: Divide daily trading volume by daily TVL to get the liquidity turnover ratio, expressed as a decimal where 1.0 means the entire TVL traded once that day

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

Trading volume divided by total liquidity.

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