# Gearbox V3 Liquidation volume Methodology

## 1. Overview

Liquidation volume is calculated as the total USD value of debt covered in liquidations across all lending markets and chains for Gearbox V3. This metric is used to quantify the volume of outstanding debt that is repaid or liquidated to maintain the solvency of the protocol's credit accounts. It is monitored as a key indicator of risk management, protocol health, and liquidation activity within the Gearbox V3 leverage ecosystem.

## 2. Data sources

- **Blockchain events**: `Repay` events from `PoolV3` contracts, and `LiquidateCreditAccount` and `PartiallyLiquidateCreditAccount` events from `CreditFacadeV3` contracts, alongside ERC-20 token transfers, covering Ethereum, Monad, and Plasma
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Gearbox V3 full liquidation debt calculation

- **Purpose**: The calculation of the debt covered during full credit account liquidations.
- **Logic**: Full liquidations are identified using `LiquidateCreditAccount` events from `CreditFacadeV3` contracts. The debt covered is determined by matching these events with corresponding `Repay` events from `PoolV3` contracts within the same transaction. The debt value is calculated by prioritizing the total debt (the sum of principal, accrued interest, and accrued fees read at the block prior to liquidation) minus any written-off loss. If the historical debt read is unavailable, the value is calculated as the pool's underlying asset inflow (extracted from ERC-20 token transfers) minus the pool's profit. If neither is available, the debt is calculated as the principal plus profit minus the written-off loss. Transactions containing multiple repay events are excluded to prevent duplication.
- **Key fields**: `written_off`, `principal`, `profit`, `total_debt`, `amount`

### Component B: Gearbox V3 partial liquidation debt calculation

- **Purpose**: The calculation of the debt covered during partial credit account liquidations.
- **Logic**: Partial liquidations are identified using `PartiallyLiquidateCreditAccount` events from `CreditFacadeV3` contracts. These events are matched with corresponding `Repay` events from `PoolV3` contracts within the same transaction. The debt covered is extracted directly from the `repaid_debt` field of the partial liquidation event.
- **Key fields**: `repaid_debt`, `seized_collateral`

### Component C: USD conversion and aggregation

- **Purpose**: The normalization of liquidation values and conversion to USD.
- **Logic**: The debt covered from both full and partial liquidations is aggregated by day, chain, and debt asset. The aggregated amounts are normalized by the decimal precision of the underlying debt asset using asset metadata. The normalized volumes are then multiplied by end-of-day asset prices to determine the daily liquidation volume in USD. Daily boundaries are defined using UTC timestamps.
- **Key fields**: `timestamp`, `liquidation_volume`, `price_usd`

*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

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).