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

LFJ (previously Trader Joe) is a non-custodial exchange protocol built on Avalanche (originally a fork of SushiSwap). LFJ was founded by an anonymous team and launched in 2021.

JOE tokenholders own and govern the protocol. They currently take a cut of the total trading fees paid by traders (revenue). LFJ's investors include Three Arrows Capital, DeFiance Capital, GBV Capital, Mechanism Capital, etc.

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# LFJ Liquidity turnover Methodology

## 1. Overview

Liquidity turnover measures how efficiently Trader Joe's liquidity pools are utilized by comparing daily trading volume to total value locked (TVL). It is calculated as the ratio of daily trading volume divided by daily TVL, indicating how many times the protocol's liquidity is "turned over" through trading activity. A higher ratio suggests more efficient capital utilization.

## 2. Data sources

- **Blockchain events**: Parsed swap events from Trader Joe contracts across Ethereum, Arbitrum, Avalanche, and BSC networks, including `Swap` events from all protocol versions (v1, v2, v2.1, v2.2)
- **Liquidity events**: `Sync` events from v1 pairs tracking reserve updates, `DepositedToBins` and `WithdrawnFromBins` events from v2+ liquidity book pairs, and `FeesCollected` events
- **Factory events**: `PairCreated` and `LBPairCreated` events from factory contracts to identify valid trading pairs across all versions
- **Transaction data**: Ethereum, Arbitrum, Avalanche, and BSC transaction records for user address identification
- **External data**: End-of-day token price feeds for USD conversion and token metadata containing decimal precision and symbols

## 3. Step-by-step calculation

### Component A: Trading volume calculation
- **Purpose**: Calculate daily trading volume across all Trader Joe protocol versions
- **Logic**: Extract swap events from all protocol versions where each version has different event structures. V1 uses `Pair_Swap_event` with `amount0In`, `amount0Out`, `amount1In`, `amount1Out` fields. V2 uses `LBPair_Swap_event` with `amountIn`, `amountOut`, and `swapForY` direction flag. V2.1 and v2.2 use packed amounts that require JavaScript decoding functions to extract `amountsX` and `amountsY` from hex strings. Join swap events with transaction records to get user addresses. Filter out denylisted trading pairs due to limited price feed support. Aggregate absolute token amounts daily by trading pair, correcting for token decimals by dividing raw amounts by 10^decimals. Convert both tokens to USD using end-of-day price feeds and take the minimum USD value between the token pair to filter out potential price manipulation. Sum trading volumes across all trading pairs and protocol versions.
- **Key fields**: `amount0In`, `amount0Out`, `amount1In`, `amount1Out` for v1; `amountIn`, `amountOut`, `swapForY` for v2; packed `amountsIn`, `amountsOut` for v2.1/v2.2

### Component B: Total value locked calculation  
- **Purpose**: Calculate the total value of assets locked in Trader Joe liquidity pools
- **Logic**: Use different approaches for each protocol version. For v1, track reserve changes through `Pair_Sync_event` which provides `reserve0` and `reserve1` amounts, then calculate daily reserve deltas by taking the difference from the previous day's reserves. For v2 and later versions, combine multiple event types: add deposits from `DepositedToBins_event`, subtract withdrawals from `WithdrawnFromBins_event` and `FeesCollected_event`, and add back trading volume with fees from swap events to maintain accurate reserve tracking. V2.1 and v2.2 events use packed amounts requiring JavaScript decoding. Apply decimal corrections using token metadata and convert token amounts to USD using end-of-day price feeds. Calculate cumulative net deposits over time as a proxy for TVL, representing the total value remaining in the protocol after accounting for all deposits, withdrawals, and trading activity.
- **Key fields**: `reserve0`, `reserve1` for v1 sync events; packed `amounts` for v2+ deposit/withdrawal events; `amountsIn`, `amountsOut`, `totalFees` for trading activity

### Final aggregation
- **Combining components**: Trading volume and TVL are calculated independently for the same daily time periods and then joined by date
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds, with trading volume using minimum USD values between token pairs to filter manipulation
- **Time aggregation**: Both metrics use daily boundaries with timestamp truncation to day level, ensuring consistent time alignment
- **Final calculation**: Liquidity turnover equals daily trading volume divided by daily TVL, representing how many times the protocol's total liquidity is traded each day

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

Trading volume divided by total liquidity.

LFJJOE

Liquidity turnover

Liquidity turnover

Competitive landscape