# Uniswap V3 Total value locked Methodology

## 1. Overview

Total value locked (TVL) measures the total value of a project's on-chain deposits. For Uniswap V3, this represents the total value of assets currently held in liquidity pools. TVL is utilized as a leading indicator for trading activity and liquidity depth, which directly drive protocol fee generation.

## 2. Data sources

- **Blockchain events**: `PoolCreated` events from `Factory` contracts, and `Mint`, `Collect`, `Swap`, and `Flash` events from `Pool` contracts, covering Ethereum, Arbitrum, Optimism, Polygon, and 11 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Uniswap V3 pool identification and denylisted pair exclusion

- **Purpose**: Identify active Uniswap V3 liquidity pools and exclude pools with unreliable pricing.
- **Logic**: Liquidity pools are identified by parsing `PoolCreated` events from `Factory` contracts, which map each pool address to its respective asset pairs and fee tier. Pools specified in a predefined denylist are excluded to prevent low-liquidity assets with limited price feed support from distorting the TVL calculations.
- **Key fields**: `pool` (pool address), `token0` (first asset address), `token1` (second asset address), and `fee` (fee tier).

### Component B: Uniswap V3 liquidity flow extraction

- **Purpose**: Capture all asset inflows and outflows for each Uniswap V3 pool.
- **Logic**: Asset flows are extracted from multiple pool-level events. Inflows are captured from `Mint` events (deposits) and `Swap` events (trades). Outflows are captured from `Collect` events (withdrawals). Flash loan fee earnings are captured from `Flash` events, where the borrowed amounts are multiplied by the pool's fee tier to determine the retained fee inflow. Additionally, historical reserve snapshots are incorporated for specific chains where pre-regenesis data is required.
- **Key fields**: `amount0` (flow amount for the first asset), `amount1` (flow amount for the second asset), and `fee_tier` (pool fee tier).

### Component C: Uniswap V3 daily net flow aggregation and normalization

- **Purpose**: Aggregate daily net asset flows and normalize them by decimal precision.
- **Logic**: Daily net flows for each asset in each pool are calculated by summing the inflows and subtracting the outflows. These raw asset amounts are normalized by joining with asset metadata and dividing by the asset's decimal precision.
- **Key fields**: `decimals` (asset decimal precision) and `timestamp` (daily interval).

### Component D: Uniswap V3 cumulative balance calculation and USD conversion

- **Purpose**: Calculate the running balance of assets in each pool and convert the values to USD.
- **Logic**: The cumulative asset balances are calculated by taking a running sum of the daily net flows over time for each pool and asset combination. A zero-floor guard is applied to ensure that cumulative balances do not drop below zero. Missing days are carried forward to maintain a continuous daily time series. Finally, the daily asset balances are multiplied by end-of-day price feeds to convert the values into USD.
- **Key fields**: `price_usd` (end-of-day asset price in 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 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 V3

Total value locked

Total value locked

Chain breakdown