# Gearbox V1 Active loans Methodology

## 1. Overview

Active loans measures the value of user deposits that are lent out to borrowers from Gearbox V1 pools. The portion of deposits that borrowers must pay interest on is tracked, which correlates with the protocol's ability to generate revenue. Only the active borrowed principal is captured, while accrued interest is excluded from this measurement. By analyzing these active credit balances, the utilization and capital efficiency of the lending pools can be evaluated.

## 2. Data sources

- **Blockchain events**: State reads of the `totalBorrowed` function from `Pool` contracts, as well as pool registry and denomination states, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Outstanding principal extraction

- **Purpose**: Extract the raw outstanding borrowed principal for Gearbox V1 pools
- **Logic**: Pool addresses and their corresponding versions are identified from the protocol registry, filtering specifically for version `V1` to isolate Gearbox V1. The denomination asset for each pool is mapped using pool configuration states. The raw outstanding principal is extracted from daily state reads of the `totalBorrowed` function for each active pool.
- **Key fields**: `pool_address`, `token_address`, `total_borrowed`

### Component B: Decimal normalization

- **Purpose**: Normalize the raw outstanding principal amounts using asset decimals
- **Logic**: The raw outstanding principal amounts are matched with asset metadata to retrieve the decimal precision for each underlying asset. The raw values are then normalized by dividing the amounts by their respective decimal precision to obtain the native asset values.
- **Key fields**: `active_loans`, `decimals`

### Component C: Forward-filling and USD conversion

- **Purpose**: Fill missing daily data points and convert normalized values to USD
- **Logic**: To account for days without state updates, a forward-fill operation is applied to carry the last known active loan balance forward for each pool and asset combination. The normalized native asset balances are then multiplied by end-of-day asset prices to calculate the active loans value in USD. Daily aggregation is performed using UTC day boundaries, and any remaining gaps are zero-filled to ensure continuous daily coverage.
- **Key fields**: `active_loans`, `price_usd`, `timestamp`

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

Value of loans currently outstanding to borrowers.

Active loans

Lending

Lenders deposit funds into Gearbox and receive interest payments from borrowers.

Gearbox is a non-custodial lending protocol built on Ethereum. Gearbox was founded by Mikhail Lazarev and launched in 2021.

GEAR tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue).

Gearbox V1

Active loans

Active loans

Chain breakdown