Overcollateralized borrowers deposit funds into Liquity and receive LUSD stablecoin.

Liquity is a non-custodial stablecoin protocol built on Ethereum. Liquity was founded by Robert Lauko & Rick Pardoe and launched in 2020.

LQTY tokenholders own & govern the protocol. They currently take all of the total borrow & redemption fees paid by borrowers (revenue). Liquity’s investors include Lemniscap, Polychain, Alameda Research, etc.

github

twitter

discord

etherscan

website

Stablecoin issuers

Liquity

# Liquity Total value locked Methodology

## 1. Overview

Total Value Locked (TVL) for Liquity measures the total USD value of ETH collateral held across the protocol's three main pools on Ethereum. This metric answers the question "How much value is currently locked in the Liquity protocol?" and serves as a key indicator of protocol adoption and capital efficiency. The calculation aggregates ETH balances from balance update events across ActivePool, StabilityPool, and DefaultPool, then converts to USD using end-of-day price feeds.

## 2. Data sources

- **Liquity protocol events**: Balance update events from three Ethereum smart contracts tracking ETH holdings across the protocol's pools
- **ActivePool events**: `ActivePool_ActivePoolETHBalanceUpdated_event` tracking collateral in active Troves
- **StabilityPool events**: `StabilityPool_StabilityPoolETHBalanceUpdated_event` tracking ETH from liquidated Troves
- **DefaultPool events**: `DefaultPool_DefaultPoolETHBalanceUpdated_event` tracking ETH from redistribution processes
- **Price data**: End-of-day token price feeds for WETH to USD conversion
- **Token metadata**: WETH contract details for decimal correction and standardization

## 3. Step-by-step calculation

### Component A: Balance update extraction
- **Purpose**: Extract and standardize ETH balance updates from three Liquity protocol pools
- **Logic**: Parse balance update events from three different Liquity smart contracts on Ethereum. ActivePool events use the `ETH` parameter to track collateral from active Troves, StabilityPool events use the `newBalance` parameter to track ETH from liquidated positions, and DefaultPool events use the `ETH` parameter to track redistributed collateral. Each event record includes block timestamp, transaction hash, and log index for precise tracking. All records are standardized with the WETH token address and assigned specific account names for pool identification
- **Key fields**: Block timestamp for temporal tracking, `amount` field containing the ETH balance from each pool, `account_name` distinguishing between ActivePool, StabilityPool, and DefaultPool balances, and `token_address` set to WETH contract address

### Component B: Business classification
- **Purpose**: Apply consistent business categorization to all balance records
- **Logic**: Classify all Liquity TVL under standardized business dimensions. Assign Interest as the business line since Liquity enables borrowing against ETH collateral, stablecoin_issuers as the market sector reflecting Liquity's role in LUSD stablecoin issuance, stablecoin_issuer as the business segment for protocol categorization, and lusd as the product identifier linking TVL to the LUSD stablecoin product
- **Key fields**: `business_line`, `market_sector_id`, `business_segment_id`, and `product_id` for dimensional consistency across metrics

### Component C: Daily aggregation
- **Purpose**: Calculate daily average TVL values to smooth intraday balance fluctuations
- **Logic**: Truncate all timestamps to day level to group balance updates by calendar day. Calculate the average of all balance amounts within each day for each combination of chain, market sector, business segment, product, token address, and account name. This averaging approach smooths the impact of multiple balance updates within a single day while preserving the overall daily TVL trend
- **Key fields**: Truncated `timestamp` at day grain, averaged `tvl` amount representing daily average balance across all pool updates

### Component D: Time series completion
- **Purpose**: Ensure continuous daily time series data without gaps
- **Logic**: Apply forward-filling logic to propagate the most recent TVL value forward for any missing days in the time series. This ensures consistent daily reporting even when no balance update events occurred on specific days. The fill operation maintains separate time series for each combination of dimensional attributes including chain, business categorization, and account name
- **Key fields**: Filled `tvl` values ensuring complete daily coverage, maintained dimensional attributes for proper time series segmentation

### Final aggregation
- **Combining components**: Sum TVL values across all three pool types (ActivePool, StabilityPool, DefaultPool) to calculate total protocol TVL for each day
- **Currency conversion**: Convert ETH amounts to USD using end-of-day WETH price feeds, ensuring consistent valuation timing across all balance records
- **Time aggregation**: Maintain daily granularity with day-level timestamp truncation, providing daily TVL snapshots
- **Final calculation**: The final TVL represents the sum of USD-converted ETH balances across ActivePool collateral, StabilityPool liquidation proceeds, and DefaultPool redistributed amounts, forward-filled to ensure complete daily coverage and filtered for chain availability

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

Total value locked (TVL)

Total value locked (TVL) — value deposited into the project's applications.

LiquityLQTY

Total value locked

Total value locked

Competitive landscape

Chain breakdown