# Uniswap V2 Total value locked Methodology

## 1. Overview

Total value locked (TVL) measures the total value of a project's on-chain deposits and/or the tokenized value of user deposits made offchain. For Uniswap V2, TVL is calculated by aggregating the USD value of all assets held within the protocol's liquidity pools. This metric is utilized as a leading indicator for trading liquidity and revenue-generating potential, reflecting the depth of liquidity available for swaps.

## 2. Data sources

- **Blockchain events**: `Sync` events from `Pair` contracts and `PairCreated` events from `Factory` contracts, covering Ethereum, Arbitrum, Avalanche, Base, and 5 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Uniswap V2 trading pair identification and filtering

- **Purpose**: Identify valid Uniswap V2 liquidity pools and filter out denylisted pairs.
- **Logic**: Liquidity pools are identified by parsing `PairCreated` events from `Factory` contracts. For each pool, the contract address, asset addresses, and asset decimals are extracted. Pools that are denylisted due to limited price feed support for low-liquidity assets are excluded from the dataset.
- **Key fields**: `account_address`, `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`

### Component B: Uniswap V2 reserve tracking and daily delta calculation

- **Purpose**: Track the daily balances and net flows of assets in each liquidity pool.
- **Logic**: Asset balances are tracked using `Sync` events from `Pair` contracts, which emit the updated reserves of both assets in the pool. The last reserve update for each pool on any given day is selected to represent the end-of-day balance. These raw reserve amounts are normalized by the decimal precision of each respective asset. Daily net flows (deltas) are calculated by subtracting the previous day's reserve balance from the current day's reserve balance.
- **Key fields**: `reserve0_amount`, `reserve1_amount`, `timestamp`

### Component C: Uniswap V2 cumulative TVL aggregation and USD conversion

- **Purpose**: Calculate the cumulative asset balances, convert them to USD, and aggregate the final TVL.
- **Logic**: Daily asset deltas are unpivoted to a single-asset grain and summed cumulatively over time to determine the running balance of each asset in each pool, with a zero-floor guard applied to prevent negative balances. Missing days are filled forward to ensure continuous daily records. The running asset balances are multiplied by end-of-day asset prices to convert the values to USD. Finally, the USD values are aggregated by day, chain, and product to produce the total value locked for Uniswap V2.
- **Key fields**: `delta_tvl`, `tvl`, `price_usd`, `timestamp`

*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 Uniswap and receive trading fees from traders (supply-side fees).

Uniswap is a non-custodial exchange protocol built on Ethereum. Uniswap was founded by Hayden Adams and launched in 2018.

UNI tokenholders own and govern the protocol. They do not currently take a cut of the total trading fees paid by traders (revenue). Uniswap's investors include Paradigm, a16z, USV, etc.

Uniswap V2

Total value locked

Total value locked

Chain breakdown