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 Average trading volume (per trade) Methodology

## 1. Overview

Average trading volume (per trade) is calculated as the total daily trading volume divided by the daily trade count on Velodrome. Insights into the typical trade size on the protocol are provided by this metric, by which user behavior and liquidity efficiency are assessed across Velodrome V1, Velodrome V2, and Velodrome Slipstream on Optimism.

## 2. Data sources

- **Blockchain events**: `PairCreated` events from `PairFactory` contracts, `PoolCreated` events from `Factory` and `CLPoolFactory` contracts, and `Swap` events from `Pair`, `Pool`, and `CLPool` contracts, which are combined with transaction records on Optimism
- **External data**: End-of-day price feeds for assets, asset metadata, and denylist configurations

## 3. Step-by-step calculation

### Component A: Trading pair identification for Velodrome V1, Velodrome V2, and Velodrome Slipstream

- **Purpose**: To identify all valid Velodrome trading pairs across protocol versions
- **Logic**: Trading pair addresses are extracted from factory contract creation events. For Velodrome V1, `PairCreated` events from `PairFactory` contracts are used. For Velodrome V2, `PoolCreated` events from `Factory` contracts are used. For Velodrome Slipstream, `PoolCreated` events from `CLPoolFactory` contracts are used. Each event is parsed to obtain the pair contract address and the two constituent asset addresses (`token0` and `token1`). These addresses are joined with asset metadata to retrieve decimal places and symbols for proper naming.
- **Key fields**: `account_address`, `token0_address`, `token1_address`, `token0_decimals`, `token1_decimals`, `version`, and `account_name`

### Component B: Raw trade data extraction for Velodrome V1, Velodrome V2, and Velodrome Slipstream

- **Purpose**: To collect and standardize swap events across all Velodrome versions
- **Logic**: `Swap` events from identified trading pairs are processed with version-specific logic. For Velodrome V1 and Velodrome V2, net asset amounts are calculated by subtracting out-amounts from in-amounts, and trades are filtered to include only those occurring from June 2022 onward. For Velodrome Slipstream, direct amount values (`amount0`, `amount1`) are used without a hardcoded start date filter. Swap events are joined with transaction data to retrieve user addresses, and trades from denylisted trading pairs are excluded.
- **Key fields**: `transaction_hash`, `log_index`, `account_address`, `user_address`, `token0_amount`, `token1_amount`, and `version`

### Component C: USD conversion and trading volume calculation

- **Purpose**: To convert raw token amounts to USD trading volumes with manipulation protection
- **Logic**: Asset amounts are normalized by decimal precision using asset metadata. Normalized amounts are joined with end-of-day price feeds to retrieve USD prices for both assets in each pair. The USD value is calculated for each asset amount, and the minimum of the two values is utilized as the trade volume to prevent price manipulation attacks. Volumes are aggregated by day, transaction, and log index.
- **Key fields**: `timestamp`, `trading_volume`, and trade identification fields

### Component D: Trade count calculation

- **Purpose**: To count distinct trades per day for the denominator
- **Logic**: Processed trade data is utilized to count distinct transaction hashes per day. Data is grouped by timestamp and product metadata fields to maintain consistent aggregation levels with the volume calculation.
- **Key fields**: `timestamp`, `trade_count`

### Component E: Final aggregation and average calculation

- **Purpose**: To calculate the final average trading volume per trade
- **Logic**: Daily trading volume totals are joined with daily trade counts on the timestamp. Total daily trading volume is divided by the daily trade count using safe division to handle days with zero trades, returning null for such cases. All data is aggregated to a daily level using timestamp truncation to UTC day boundaries.
- **Key fields**: `timestamp`, `trading_volume_avg_per_trade_count`

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

VelodromeVELO

Average trading volume (per trade)

Average trading volume (per trade)

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