Liquidity providers deposit funds into Velodrome and stake their LP tokens to receive VELO tokens in proportion to their share of the votes (token incentives).

Velodrome is a non-custodial exchange protocol built on Optimism. Velodrome was founded by veDAO members and launched in 2022.

VELO tokenholders own and govern the protocol. They vote which pools they wish to earn trading fees from (revenue), while the pools' unstaked liquidity providers earn the remainder of the trading fees (supply-side fees).

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Exchanges (DEX)

Velodrome

# Velodrome Trade count Methodology

## 1. Overview

The Velodrome trade count metric measures the daily number of unique trades executed across all Velodrome DEX versions on Optimism. A trade is defined as a unique transaction containing one or more swap events. The metric counts distinct transaction hashes per day, providing insight into trading activity and user engagement across Velodrome's V1, V2, and Slipstream (V3) products.

## 2. Data sources

The calculation relies on several key data sources:

- **Swap events**: Parsed `Swap` events from Velodrome V1 (`Pair_Swap_event`), V2 (`Pool_Swap_event`), and V3 (`CLPool_Swap_event`) contracts on Optimism
- **Transaction data**: Optimism transaction records providing user addresses and timestamps for each swap transaction
- **Pool creation events**: Parsed pool/pair creation events from Velodrome factory contracts (`PairFactory_PairCreated_event`, `Factory_PoolCreated_event`, `CLPoolFactory_PoolCreated_event`) to identify valid trading pairs
- **Token metadata**: Token registry containing symbol, decimal, and address information for traded assets
- **End-of-day price feeds**: Daily USD price data for tokens traded on Velodrome pairs
- **Configuration data**: Hardcoded denylist of low-liquidity trading pairs with limited price feed support

## 3. Step-by-step calculation

### Component A: Raw trade extraction
- **Purpose**: Extract and standardize swap events from all three Velodrome product versions
- **Logic**: Query `Swap` events from Velodrome V1 and V2 contracts (starting 2022-06-01) and V3 contracts (starting 2024-06-18). For V1/V2, calculate token amounts as the difference between `amountIn` and `amountOut` fields. For V3, use direct `amount0` and `amount1` values. Join with Optimism transaction records to obtain user addresses and ensure data quality. Classify trades by product version (V1, V2, Slipstream) and assign business categorization (exchanges market sector, dex business segment)
- **Key fields**: `block_timestamp`, `transaction_hash`, `log_index`, `account_address` (pool), `user_address`, `token0_amount`, `token1_amount`, `product_id`

### Component B: Trading pair dimensions
- **Purpose**: Build comprehensive trading pair metadata and apply quality filters
- **Logic**: Extract pool/pair addresses from factory creation events across all three Velodrome versions. Enrich with token metadata including decimals and symbols to create readable pair names. Apply denylist filtering to exclude problematic pairs with limited price feed support (currently one V1 pair on Optimism). Join trade data with valid trading pairs to ensure only legitimate pools are included
- **Key fields**: `account_address`, `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`, `account_name`, `version`

### Component C: Daily trade aggregation
- **Purpose**: Process trades into daily volumes and prepare for counting distinct transactions
- **Logic**: Truncate timestamps to daily boundaries and group trades by day, chain, business dimensions, and trading pair. Correct token decimal places by dividing amounts by 10^decimals for each token. Convert token amounts to USD using end-of-day price feeds, applying the lesser of the two token values to mitigate price manipulation. Aggregate trade data while preserving unique transaction identifiers needed for counting
- **Key fields**: `timestamp` (daily), `transaction_hash`, `chain`, `market_sector_id`, `business_segment_id`, `product_id`, `trading_volume`

### Final aggregation
- **Combining components**: The processed daily trade data flows into the final metric calculation where distinct transaction hashes are counted per day
- **Currency conversion**: USD conversion occurs in the intermediate volume step using end-of-day price feeds, though the final trade count metric only uses transaction hash uniqueness
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with each day representing a complete 24-hour period
- **Final calculation**: Count distinct `transaction_hash` values per day, grouped by `chain`, `market_sector_id`, `business_segment_id`, and `product_id`. Apply the finalize metric macro to standardize output format, fill missing days with zero values, and ensure consistent business dimension labeling across the dataset

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

Number of trades executed on a decentralized exchange.

VelodromeVELO

Trade count

Trade count

Competitive landscape

Chain breakdown