Traders exchange funds through request for quotation system built on 0x protocol and aggregated AMMs. Tokenlon collects a trading fee (revenue) from trades.

Tokenlon is a non-custodial exchange protocol built on Ethereum. Tokenlon was founded by imToken team and launched in 2018.

LON tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). Tokelon's investors include IDG Capital, Qiming Venture Partners, Breyer Capital, etc.

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# Tokenlon Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how efficiently Tokenlon's liquidity is being utilized by calculating the ratio of daily trading volume to total value locked (TVL). This metric indicates how many times the available liquidity is "turned over" through trading activity, with higher ratios suggesting more efficient capital utilization. The calculation divides daily trading volume by TVL to produce a dimensionless ratio.

## 2. Data sources

The calculation relies on several blockchain data sources:

- **Ethereum and Arbitrum transaction logs**: Parsed swap events from Tokenlon's various contract versions including `ZeroExchange_Fill_event`, `AMMWrapper_Swapped_event`, `AMMWrapperWithPath_Swapped_event`, `PMM_FillOrder_event`, `RFQ_FillOrder_event`, and `LimitOrder_LimitOrderFilledByProtocol_event`
- **Transaction traces**: Ethereum and Arbitrum transaction data to identify user addresses and validate swap participants  
- **Token transfer events**: Ethereum blockchain events tracking token movements to and from Tokenlon contract addresses
- **End-of-day price feeds**: Daily USD pricing data for all tokens involved in swaps and held in contracts
- **Token metadata**: Information about token symbols, decimal places, and contract addresses for proper amount calculations

## 3. Step-by-step calculation

### Component A: Trading volume calculation

- **Purpose**: Aggregates the total USD value of all swaps executed through Tokenlon protocols daily
- **Logic**: The system collects swap events from multiple Tokenlon contract versions across Ethereum and Arbitrum networks. For each swap event, it extracts the token pair addresses, traded amounts, and user information. Native token addresses (like `0x0000000000000000000000000000000000000000`) are automatically converted to their wrapped equivalents (WETH on Ethereum, WETH on Arbitrum). The system applies decimal corrections using token metadata to convert raw token amounts to human-readable values. Each swap's USD value is calculated by converting both tokens in the pair to USD using end-of-day price feeds, then taking the minimum USD value between the two tokens to prevent price manipulation attacks. Daily trading volumes are aggregated across all swap events
- **Key fields**: `takerAssetAmount`, `makerAssetAmount`, `takerAssetAddr`, `makerAssetAddr`, `block_timestamp`, and `transaction_hash` from various swap event types

### Component B: Total value locked (TVL) calculation  

- **Purpose**: Measures the total USD value of tokens held in Tokenlon's smart contracts
- **Logic**: The system tracks token balance changes across six specific Tokenlon contract addresses on Ethereum by monitoring token transfer events. For each contract address, it calculates the net token inflows and outflows over time to determine current token holdings. The system computes cumulative token balances for each token at each contract address, using daily snapshots and filling forward any missing days to ensure continuous time series data. Token balances are converted to USD values using end-of-day price feeds. The total TVL represents the sum of all token values held across all monitored Tokenlon contracts
- **Key fields**: `balance`, `token_address`, `account_address`, `timestamp` from token balance changes, and `price_usd` from price feeds

### Final aggregation

- **Combining components**: Trading volume and TVL are calculated independently for the same time periods, then joined on date and chain dimensions
- **Currency conversion**: Both components use end-of-day USD price feeds for consistent valuation timing and currency standardization  
- **Time aggregation**: All calculations use daily boundaries with timestamp truncation to day level
- **Final calculation**: Liquidity turnover is computed as the simple ratio of daily trading volume divided by daily TVL, producing a dimensionless metric indicating capital efficiency

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

Trading volume divided by total liquidity.

TokenlonLON

Liquidity turnover

Liquidity turnover

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