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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Velodrome

# Velodrome Trading volume Methodology

## 1. Overview

Velodrome trading volume measures the total USD value of tokens traded across all Velodrome decentralized exchange pools on Optimism. This metric captures trading activity across Velodrome V1 (classic AMM), V2 (improved AMM), and V3 Slipstream (concentrated liquidity) protocols. The calculation aggregates individual swap transactions, converts token amounts to USD values, and applies anti-manipulation safeguards to ensure accurate volume reporting.

## 2. Data sources

- **Velodrome factory events**: Parsed `PairCreated` events from Velodrome V1 PairFactory, `PoolCreated` events from Velodrome V2 Factory, and `PoolCreated` events from Velodrome V3 CLPoolFactory on Optimism to identify valid trading pairs
- **Velodrome swap events**: Parsed `Swap` events from V1 Pair contracts, V2 Pool contracts, and V3 CLPool contracts on Optimism capturing individual trades
- **Optimism transaction data**: Transaction records providing user addresses and timestamps for each swap
- **Token metadata**: Token registry containing symbols and decimal precision for proper amount normalization
- **End-of-day price feeds**: Daily token price data in USD for accurate volume conversion
- **Denylist configuration**: Hardcoded list of low-liquidity trading pairs excluded due to unreliable price feeds

## 3. Step-by-step calculation

### Component A: Trading pair identification
- **Purpose**: Establishes the universe of valid Velodrome trading pairs across all protocol versions
- **Logic**: Extract trading pairs from factory contract creation events across Velodrome V1, V2, and V3 protocols. For V1, parse `PairCreated` events from the PairFactory contract capturing the `pair` address. For V2 and V3, parse `PoolCreated` events from Factory and CLPoolFactory contracts capturing the `pool` address. Each event provides the two token addresses that form the trading pair. Join this data with token metadata to retrieve decimal precision and symbols for both tokens in each pair. Construct a comprehensive registry mapping each trading pair address to its constituent tokens and metadata.
- **Key fields**: `account_address` (trading pair contract), `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`, `account_name` (token symbol concatenation)

### Component B: Trade event processing and filtering
- **Purpose**: Captures individual swap transactions and calculates token amount changes
- **Logic**: Process swap events differently based on protocol version. For V1 and V2, parse `Swap` events and calculate net token changes by subtracting `amount0Out` from `amount0In` and `amount1Out` from `amount1In` to determine the actual token amounts exchanged. For V3, use the direct `amount0` and `amount1` values from the `Swap` events as the protocol structure differs. Join each swap with Optimism transaction data to retrieve the originating user address. Apply denylist filtering to exclude trades from specific low-liquidity pairs where price feed reliability is insufficient. Each trade record includes timestamp, transaction identifiers, user addresses, and raw token amounts.
- **Key fields**: `block_timestamp`, `transaction_hash`, `log_index`, `account_address`, `user_address`, `token0_amount`, `token1_amount`

### Component C: Daily aggregation and normalization
- **Purpose**: Aggregates trades to daily granularity and normalizes token amounts
- **Logic**: Group all trades by calendar day while preserving individual trade details for granular analysis. For each trade, normalize token amounts by dividing by 10 raised to the power of each token's decimal precision to convert from raw blockchain integers to human-readable amounts. Take absolute values of all token amounts to measure trading volume regardless of trade direction (buy vs sell). Join the aggregated trade data with the trading pair registry to access token metadata required for normalization. Sum normalized amounts for each token across all trades within each day.
- **Key fields**: `timestamp` (daily), `token0_amount` (normalized), `token1_amount` (normalized), `token0_address`, `token1_address`

### Component D: USD conversion with anti-manipulation logic
- **Purpose**: Converts token amounts to USD values while preventing price manipulation
- **Logic**: Join the normalized trade data with end-of-day price feeds for both tokens in each trading pair. Calculate the USD value for each token by multiplying the normalized token amount by its corresponding USD price. Apply anti-manipulation logic by taking the minimum USD value between the two tokens in each trade - this prevents inflated volume reporting when one token in a pair has manipulated or unreliable pricing. If either token lacks price data, default the trading volume to zero for that trade.
- **Key fields**: `trading_volume` (minimum of token0_usd and token1_usd values), `price_usd` for both tokens

### Final aggregation
- **Combining components**: Sum all individual trade volumes across all trading pairs and protocol versions to generate total daily trading volume
- **Currency conversion**: USD conversion occurs at the individual trade level using end-of-day price feeds matched to the trade date
- **Time aggregation**: Trades are grouped by calendar day boundaries using timestamp truncation to day precision
- **Final calculation**: Total trading volume equals the sum of all individual trade volumes where each trade volume is the minimum USD value between the two tokens exchanged in that trade

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

Total value of spot trades executed on the exchange.

VelodromeVELO

Trading volume

Trading volume

Competitive landscape

Chain breakdown