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.

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Hydration

# Hydration Active loans Methodology

## 1. Overview

Active loans measures the total value of assets that have been borrowed from Hydration Lending. It tracks the portion of user deposits that are currently lent out and accruing interest, serving as a primary indicator of the protocol's utilization and its capacity to generate interest-based revenue. This metric is calculated by monitoring the outstanding supply of variable debt tokens, which represent the principal and accrued interest owed by borrowers.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from `VariableDebtToken` contracts, covering Hydration Substrate
- **External data**: End-of-day price feeds for underlying borrowed assets

## 3. Step-by-step calculation

### Component A: Variable debt token event parsing

- **Purpose**: Capture changes in the amount of debt owed by borrowers for each supported asset.
- **Logic**: ERC-20 `Transfer` events are parsed from the Hydration Substrate EVM pallet for specific debt token contracts. Transfers originating from the null address are identified as `Mint` events, representing new borrowing or interest accrual. Transfers sent to the null address are identified as `Burn` events, representing loan repayments or liquidations. Data is filtered to include only those contracts mapped as variable debt tokens within the protocol's lending architecture.
- **Key fields**: `from_address`, `to_address`, `data_hex` (amount), and `token_address`.

### Component B: Loan balance aggregation

- **Purpose**: Calculate the total outstanding loan balance for each asset.
- **Logic**: Daily net changes are calculated by subtracting the total burned amount from the total minted amount for each debt token. A rolling sum of these net changes is performed across the protocol's history to determine the current supply of debt tokens for every asset. This running total represents the total active loans (principal plus accrued interest) at any given point in time.
- **Key fields**: `mint_amount`, `burn_amount`, and `token_supply`.

### Component C: USD normalization and valuation

- **Purpose**: Convert asset-specific loan balances into a standardized USD value.
- **Logic**: Loan amounts are normalized by the decimal precision specific to each underlying asset. These normalized values are then multiplied by end-of-day price feeds. For most assets, price data is retrieved from standard daily price feeds; for specific assets like Ethereum, market data from external providers is utilized. Values are forward-filled to ensure continuity on days without transfer activity and aggregated to provide a comprehensive view of active loans across the Hydration Lending product.
- **Key fields**: `active_loans`, `price_usd`, and `underlying_token_id`.

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

Value of loans currently outstanding to borrowers.

HydrationHDX

Active loans

Active loans

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Chain breakdown