# PancakeSwap V3 Trading volume Methodology

## 1. Overview

Trading volume is measured as the total value of trades executed on PancakeSwap V3. This metric is utilized to evaluate the protocol's liquidity, user activity, and capacity to generate trading fees and protocol revenue. By analyzing the volume of assets swapped across various liquidity pools, the protocol's market share and overall utility within the decentralized exchange ecosystem are assessed.

## 2. Data sources

- **Blockchain events**: `PoolCreated` events from `Factory` contracts and `Swap` events from `Pool` 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: Trading pair and pool identification

- **Purpose**: Identify active PancakeSwap V3 liquidity pools and their associated assets.
- **Logic**: `PoolCreated` events from `Factory` contracts are parsed to extract pool addresses, asset addresses, and fee tiers. Asset metadata is matched to retrieve decimal precision and symbols for each asset in the pair. Denylisted trading pairs are excluded based on a predefined list of pool addresses with limited price feed support.
- **Key fields**: `pool_address`, `token_address_0`, `token_address_1`, `fee_tier`

### Component B: Trade event extraction and normalization

- **Purpose**: Capture individual swap transactions and normalize asset amounts.
- **Logic**: `Swap` events from `Pool` contracts are parsed to extract raw swap amounts for both assets in a pool. These raw amounts are normalized by the decimal precision of their respective assets. Swap directions are determined based on whether the first asset's amount is positive.
- **Key fields**: `amount_0`, `amount_1`, `block_timestamp`, `transaction_hash`

### Component C: Price outlier filtering

- **Purpose**: Filter out wash trading and price manipulation outliers.
- **Logic**: Daily end-of-day price feeds are matched for both assets in each trade. The USD value of both swap legs is calculated, and trades where the values of the two legs diverge by more than 100x are flagged as price outliers. These outlier trades are excluded from the final aggregation.
- **Key fields**: `price_usd`, `is_price_outlier`

### Component D: USD conversion and final aggregation

- **Purpose**: Convert normalized trade volumes to USD and aggregate to daily intervals.
- **Logic**: The daily swap amounts for each pool are converted to USD using end-of-day price feeds, backup prices, or external market data. To ensure accuracy and mitigate pricing discrepancies, the final trading volume for each swap is determined as the minimum USD value of the two swap legs. The volumes are then aggregated by day, chain, and product, with a chain availability filter applied to ensure data freshness.
- **Key fields**: `trading_volume`, `timestamp`, `chain_id`, `product_id`

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

Total value of spot trades executed on the exchange.

Trading 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

Trading volume

Trading volume

Chain breakdown