# PancakeSwap V3 Flash loan volume Methodology

## 1. Overview

Flash loan volume is defined as the total value of assets borrowed and repaid within the same transaction through PancakeSwap V3. Since fees are paid by users on each flash loan, this metric is correlated with the ability of PancakeSwap V3 to generate fees and revenue from arbitrage-based activity. This volume is analyzed to understand capital efficiency and the utilization of PancakeSwap V3 liquidity pools for instantaneous, single-transaction financial operations.

## 2. Data sources

- **Blockchain events**: `Flash` events from `Pool` contracts and `PoolCreated` events from `Factory` contracts, covering Arbitrum, Base, BNB Chain, Ethereum, and zkSync Era
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Pool initialization and metadata mapping

- **Purpose**: Identify active PancakeSwap V3 liquidity pools and map their associated assets.
- **Logic**: `PoolCreated` events from `Factory` contracts are parsed to identify pool addresses, asset addresses, and fee tiers. Pool addresses are matched with asset metadata to retrieve decimal precision and symbols for both assets in each trading pair.
- **Key fields**: `pool` address, asset addresses, and `fee` tier

### Component B: Flash loan event extraction

- **Purpose**: Capture raw flash loan transactions and identify the borrowed amounts.
- **Logic**: `Flash` events from `Pool` contracts are extracted across all supported chains. These events are joined with transaction data to identify the transaction sender and the initiating user address. Borrowed amounts for both assets in the pool are extracted from the event parameters. Pools identified as denylisted due to limited price feed support for low-liquidity assets are filtered out.
- **Key fields**: `block_timestamp`, `transaction_hash`, `address` (pool address), `amount0` (borrowed amount for the first asset), and `amount1` (borrowed amount for the second asset)

### Component C: Decimal normalization and USD conversion

- **Purpose**: Normalize asset amounts and convert them to USD values.
- **Logic**: Raw asset amounts are normalized by the decimal precision of each respective asset. The normalized amounts are multiplied by the corresponding end-of-day asset prices. The USD values of both borrowed assets are summed to calculate the total flash loan volume per transaction.
- **Key fields**: asset decimals and `price_usd`

### Component D: Daily aggregation and finalization

- **Purpose**: Aggregate flash loan volume to a daily granularity and apply final filters.
- **Logic**: Transaction-level flash loan volumes are aggregated by day, chain, and product. Missing days are zero-filled to ensure continuous time series data, and chain availability filters are applied to align the data with approved chain freshness boundaries.
- **Key fields**: `timestamp`, `chain_id`, and `flash_loan_volume`

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

Total value of assets borrowed and repaid within the same transaction.

Flash loan volume

Exchanges (DEX)

Liquidity providers deposit funds into PancakeSwap and receive trading fees from traders (supply-side fees).

PancakeSwap is a non-custodial exchange protocol built on Binance Smart Chain and other blockchains (originally a fork of Uniswap). PancakeSwap was founded by an anonymous team and launched in 2020.

CAKE tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue).

PancakeSwap V3

Flash loan volume

Flash loan volume

Chain breakdown