# PancakeSwap V3 Total value locked Methodology

## 1. Overview

Total value locked (TVL) is calculated as the total value of assets deposited in PancakeSwap V3 liquidity pools. It is utilized as a key indicator of the protocol's liquidity depth and its capacity to facilitate trades with minimal slippage. Asset balances are tracked dynamically by aggregating on-chain flows, including deposits, withdrawals, swaps, and flash loan fees. The accumulated balances are normalized and converted to USD to represent the aggregate capital locked within the protocol.

## 2. Data sources

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

## 3. Step-by-step calculation

### Component A: Pool and asset identification

- **Purpose**: Identify active PancakeSwap V3 pools, associated assets, and fee tiers
- **Logic**: `PoolCreated` events from `Factory` contracts are parsed to extract pool addresses, asset addresses, and fee tiers. Pool configurations are joined with asset metadata to retrieve decimal values. Denylisted pool addresses are filtered out to prevent distorted calculations
- **Key fields**: `pool_address`, `token_address`, `fee_tier`

### Component B: PancakeSwap V3 asset flow extraction

- **Purpose**: Capture daily asset inflows and outflows for each pool
- **Logic**: Daily asset flows are calculated by aggregating multiple transaction types from `Pool` contracts. Inflows are captured from `Mint` events (deposits). Outflows are captured as negative values from `Collect` and `CollectProtocol` events (withdrawals). Trade-induced asset changes are extracted from `Swap` events. Flash loan fee contributions are calculated by multiplying the loan amounts from `Flash` events by the pool's fee tier
- **Key fields**: `amount`, `fee_tier`

### Component C: Decimal normalization and allowlist filtering

- **Purpose**: Normalize asset quantities and filter out unverified or low-liquidity assets
- **Logic**: Raw asset amounts are normalized by decimal precision. An allowlist from an external asset directory is applied to filter out assets with manipulated prices or insufficient liquidity, with a specific asset (`0xbb73bb2505ac4643d5c0a99c2a1f34b3dfd09d11`) explicitly excluded. This allowlist filter is applied to all chains except zkSync Era, which is exempted from the filter due to limited external directory coverage
- **Key fields**: `decimals`, `token_address`

### Component D: Cumulative aggregation and USD conversion

- **Purpose**: Compute cumulative balances and convert them to USD
- **Logic**: Daily net asset flows are aggregated by pool, asset, and chain. Cumulative asset balances are calculated using a running sum over time. Missing daily records are forward-filled to ensure continuous time series. Cumulative balances are multiplied by end-of-day asset prices to determine the USD value of the locked assets, which are then aggregated to produce the final TVL metric
- **Key fields**: `timestamp`, `tvl`, `price_usd`

*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.

Total value locked

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

Total value locked

Total value locked

Chain breakdown