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# Shadow Total value locked Methodology

## 1. Overview

ShadowExchange TVL (Total Value Locked) represents the total USD value of assets deposited in the protocol's liquidity pools across both v2 and v3 versions. The metric is calculated as net deposits, measuring the cumulative value of tokens flowing into the protocol minus tokens flowing out. This approach captures the actual locked value by tracking reserve changes in v2 pairs and comprehensive activity flows in v3 pools, including deposits, withdrawals, trades, and flash loans.

## 2. Data sources

The calculation relies on several types of raw blockchain data and external feeds:

- **ShadowExchange v2 events**: Parsed `Pair_Sync_event` logs that record reserve updates for trading pairs on Sonic blockchain
- **ShadowExchange v3 events**: Parsed event logs including `Pool_Mint_event` (deposits), `Pool_Collect_event` (withdrawals), `Pool_Swap_event` (trades), and `Pool_Flash_event` (flash loans) on Sonic blockchain
- **Factory events**: Parsed `Factory_PairCreated_event` and `Factory_PoolCreated_event` logs for trading pair creation, plus fee-related events like `PairFactory_SetFee_event` and `PoolFactory_FeeAdjustment_event`
- **Transaction data**: Sonic blockchain transaction records for user address identification
- **Price feeds**: End-of-day USD price data for all tokens involved in trading pairs
- **Token metadata**: Token contract information including decimal precision and symbols for proper amount calculations

## 3. Step-by-step calculation

### Component A: V2 reserve tracking
- **Purpose**: Calculate daily changes in v2 trading pair reserves
- **Logic**: Extract the last reserve amounts for each trading pair on each day from `Pair_Sync_event` logs. Calculate the difference between consecutive days' reserves for each pair. If no previous day exists (first day of data), use the current day's reserve amount as the change. Apply decimal corrections using token metadata to convert raw amounts to proper token units.
- **Key fields**: `reserve0_amount` and `reserve1_amount` from sync events, `token0_decimals` and `token1_decimals` from trading pair metadata

### Component B: V3 activity flows  
- **Purpose**: Aggregate all v3 pool activities that affect locked value
- **Logic**: Combine four types of v3 activities: deposits from `Pool_Mint_event` (positive flow), withdrawals from `Pool_Collect_event` (negative flow), trades from `Pool_Swap_event` (directional token flow), and flash loans from `Pool_Flash_event` (multiplied by pool fee tier to capture fees earned). For flash loans, apply the appropriate fee tier based on timing using pool fee change events. Aggregate all activities by day and apply decimal corrections.
- **Key fields**: `amount0` and `amount1` from various pool events, `fee_tier` from pool fee configurations, `token0_decimals` and `token1_decimals` from trading pair metadata

### Component C: Net deposits calculation
- **Purpose**: Combine v2 and v3 flows and calculate net deposits using DEX-specific logic  
- **Logic**: Union the v2 reserve changes and v3 activity flows. Apply the DEX net deposits calculation which sums token flows for each trading pair while maintaining proper accounting for both tokens in each pair. This captures the net change in total value locked by aggregating inflows and outflows.
- **Key fields**: `token0_amount` and `token1_amount` flows from both v2 and v3 components

### Component D: USD conversion and aggregation
- **Purpose**: Convert token amounts to USD and aggregate across all trading pairs
- **Logic**: For each trading pair's daily net deposits, multiply `token0_amount` by the end-of-day USD price for token0 and `token1_amount` by the end-of-day USD price for token1. Sum these USD values to get total USD net deposits for each pair. If price data is missing for a token, treat its USD value as zero.
- **Key fields**: `price_usd` from price feeds, calculated `net_deposits` in USD

### Final aggregation
- **Combining components**: Sum the USD net deposits across all trading pairs to get protocol-wide net deposits
- **Currency conversion**: Uses end-of-day USD prices for all tokens, with missing prices defaulted to zero
- **Time aggregation**: Data is aggregated at daily boundaries using timestamp truncation to day level
- **Final calculation**: The total net deposits value represents TVL, as it captures the cumulative USD value of assets that have flowed into and remain locked in the protocol's liquidity pools across both v2 and v3 versions

*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.

ShadowSHADOW

Total value locked

Total value locked

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