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).

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Gearbox

# Gearbox Liquidation volume Methodology

## 1. Overview

Liquidation volume measures the total USD value of debt covered in liquidations across all Gearbox lending markets. This metric is used to assess the volume of outstanding debt closed out by liquidators to maintain protocol solvency during market downturns. Both full and partial liquidations are covered across Gearbox V1, Gearbox V2, and Gearbox V3, reflecting the efficiency and health of the protocol's credit account system.

## 2. Data sources

- **Blockchain events**: `Repay` events from `PoolV3` and `Pool` contracts, `LiquidateCreditAccount` and `PartiallyLiquidateCreditAccount` events from `CreditFacadeV3` contracts, `LiquidateCreditAccount` and `OpenCreditAccount` events from `CreditManager` and `CreditFacade` contracts, and 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 tracking

- **Purpose**: Calculates the debt covered in full liquidations for Gearbox V3
- **Logic**: Full liquidations are identified using `LiquidateCreditAccount` events from `CreditFacadeV3` contracts. The debt to cover is determined by matching these events with `Repay` events from `PoolV3` contracts within the same transaction. The total debt (the sum of principal, accrued interest, and accrued fees) is retrieved from historical liquidation debt records at the block prior to the liquidation. The final debt to cover is calculated by subtracting any written-off loss from the total debt. If historical debt records are unavailable, the value is calculated using ERC-20 token transfers of the pool's underlying debt asset to the pool address (subtracting pool profit), or as a fallback, by adding principal and profit and subtracting the written-off loss.
- **Key fields**: `written_off`, `principal`, `profit`, `total_debt`, `amount`

### Component B: Gearbox V3 partial liquidation tracking

- **Purpose**: Calculates the debt covered in partial liquidations for Gearbox V3
- **Logic**: Partial liquidations are identified using `PartiallyLiquidateCreditAccount` events from `CreditFacadeV3` contracts. These events are joined with `Repay` events from `PoolV3` contracts to verify the transaction. The debt covered is extracted directly from the repaid debt field of the partial liquidation event.
- **Key fields**: `repaidDebt`, `seizedCollateral`

### Component C: Legacy Gearbox V1 and Gearbox V2 liquidation tracking

- **Purpose**: Calculates the debt covered in liquidations for Gearbox V1 and Gearbox V2
- **Logic**: Liquidations are identified using `LiquidateCreditAccount` events from `CreditManager` (V1) and `CreditFacade` (V2) contracts. Because direct debt reads are unavailable for legacy versions, the debt to cover is calculated by tracking ERC-20 token transfers of the pool's underlying debt asset to the pool address (subtracting pool profit), or as a fallback, by adding principal and profit and subtracting the written-off loss. To identify the liquidated credit account, the borrower address is matched to the most recent credit account opened via `OpenCreditAccount` events from `CreditManager` (V1) and `CreditFacade` (V2) contracts prior to the liquidation block.
- **Key fields**: `written_off`, `principal`, `profit`, `amount`

### Component D: USD conversion and aggregation

- **Purpose**: Normalizes liquidation volumes to USD and aggregates them daily
- **Logic**: The debt covered for each liquidation is mapped to its corresponding pool underlying debt asset using pool denomination metadata. The raw asset amounts are normalized by decimal precision using asset metadata. The normalized amounts are then multiplied by end-of-day asset prices to convert the values to USD. The daily liquidation volume is aggregated by summing the USD values by day, chain, and product ID (where Gearbox V2 liquidations are grouped under Gearbox V1) using UTC day boundaries.

*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

Liquidation volume

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