# Hydration Lending Active loans Methodology

## 1. Overview

Active loans for Hydration Lending is measured by tracking the total value of assets currently borrowed from the protocol. This metric represents the portion of supplied capital that is utilized by borrowers and is currently accruing interest. It is calculated by aggregating the total supply of variable debt tokens, which are issued to borrowers to represent their outstanding debt.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from Variable Debt Token contracts (parsed as `Log` events within the `evm` pallet) on Hydration Substrate
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Hydration Lending debt event extraction

- **Purpose**: Capture all borrowing and repayment activities for supported assets
- **Logic**: ERC-20 `Transfer` events are parsed from the Hydration Substrate EVM log pallet. Mints (representing new borrows) are identified as transfers originating from the null address. Burns (representing repayments or liquidations) are identified as transfers sent to the null address. These events are filtered for specific Variable Debt Token addresses, which are mapped to their underlying assets and decimal precision using project metadata.
- **Key fields**: `data_hex` (amount), `from_address` (sender), `to_address` (recipient), and `token_address` (debt asset identifier)

### Component B: Cumulative loan balance calculation

- **Purpose**: Determine the total outstanding borrowed balance for each asset
- **Logic**: Daily net changes in the supply of each debt token are calculated by subtracting the total burn amounts from the total mint amounts. A cumulative rolling sum is applied to these daily deltas to track the total supply of debt tokens over time. This supply directly corresponds to the total amount of active loans for each respective asset.
- **Key fields**: `mint_amount` and `burn_amount`

### Component C: USD normalization and forward filling

- **Purpose**: Standardize loan values into USD for cross-asset comparison and reporting
- **Logic**: Loan amounts are normalized by decimal precision based on the underlying asset's metadata. For days without on-chain activity, the last known balance is carried forward using forward-filling logic to ensure a continuous time series. These normalized amounts are then multiplied by end-of-day price feeds to calculate the total USD value of active loans.
- **Key fields**: `price_usd` and `active_loans` (token supply)

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

Value of loans currently outstanding to borrowers.

Active loans

Lending

Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Hydration is a Polkadot parachain specialized in trading, lending, and stablecoin issuance.

HDX holders own and govern the protocol. Hydration’s investors include KR1 plc, Hypersphere, etc.

Hydration Lending

Active loans

Active loans

Chain breakdown