TLDR: GMV can be thought as part of deposits that gets traded, borrowed or deployed depending on the protocol.
In traditional companies GMV (Gross merchandise volume) is the total value of merchandise sold over a period of time, usually through a marketplace. For protocols GMV can be thought as part of deposits that gets traded, borrowed or deployed depending on the protocol.
As a valuation metric GMV together with deposits gives a sense of growth of the business that deposits or TVL alone doesn’t. As an example, lenders on top of Compound can supply a lot of assets to the protocol for a brief time but won’t keep them there for long if there’s no borrowing activity (basis for yield) happening.
GMV is also the basis for enabling the calculation of our fee & revenue metrics, the definition being different for different types of protocols.
Uniswap is an AMM-based decentralized exchange. Liquidity providers deposit funds into pools and receive a return on investment (supply-side fees) from the fees charged for each token swap. The protocol currently doesn’t take a cut of any of the swap fees paid by traders.
GMV for Uniswap means the total trading volume occuring from traders swapping tokens. We index each pool's Swap event to track the volume and subsequently the fees and revenue. The example below showcases V3 USDC / ETH pool's and V2 USDC / ETH pair's relevant events and their parameters for volume calculations.
Compound is a non-custodial lending protocol built on Ethereum. Lenders deposit funds into Compound and receive interest payments from borrowers (supply-side fees). GMV is the outstanding loans borrowers owe to lenders.
We index each lending market's AccrueInterest event to track the amount borrowed by borrowers. The example below showcases USDC market's relevant events and their parameters for GMV calculations.