Introduction

Optimism with OP token is one of Ethereum layer 2 projects, which uses the Optimistic Rollup protocol to increase the transaction speed and reduce the cost in Ethereum.

The OP token plays an essential role in Optimism network management. In the first Optimism token launched and airdropped in May 2022, part of its initial supply was provided to the first users of this network.

Method

The swap volume that we considered here includes the swap volume on both the Sushi and Velodrome platforms, which we obtained using optimism.velodrome.ez_swaps & optimism.sushi.ez_swaps tables.

The $OP price calculated with help of optimism.core.fact_hourly_token_prices table which the Token address of $OP is: 0x4200000000000000000000000000000000000042

First we analyzed the all swaps Volume that contained $OP token then break it down by swap direction which are :

1. swap another Token to $OP (swap to $OP)
2. swap from $OP to another Token Volume (swap from $OP)

we here included a helpful parameter which called correlation coefficient with help of Corr() function to express the problem numerically

All the analyses that are over Time are in daily timeframe except the correlation coefficient over Time which is in weekly Timeframe

we included all the data that are available from day one until now

Conclusion

• from June 14 to July 13 when the price had side trend the Volume and average swap size reached the lowest numbers
• from July 14 when the Price started upward movement both the average swap size and the swap volume rose along with the price
• upward trend of Volume ended earlier than the price unlike the average swap size
• from August 5th when price decreasing started we also see a decrease in the volume and average size of the swap
• correlation coeeficent is higher on swap volume than average swap size that is mean the price have a stronger correlation with volume
• on Jun 07 week the correlation between Volume and $OP price reached the highest amount when correlation coeeficent reached 0.814
• swap to $OP Volume has a little higher correlation with $OP Price than swap from $OP because his correlation coefficient is higher
• The highest amount of correlation between swap to $OP Volume and price was on Jun 20 week with 0.83.
• The highest amount of correlation between swap to $OP Volume and price was on Jun 20 week with 0.83.

Overview

here, we aim to provide these topics:

• Correlation between $OP swap Volume and $OP price
• Correlation between $OP average swap size and $OP price
• Correlation between swap to $OP Volume and $OP price
• Correlation between swap from $OP Volume and $OP price

Thanks For your time

Discord and Twitter: Abbas_ra21

date: 2022-10-5

Picture source: Link

Observation

from above graphs I wanted to know that which direction of $OP swap has a higher correlation with $OP price but seems that are almost have equal correlation, but we can say that swap to $OP Volume has a little higher correlation with $OP Price because his correlation coefficient is higher

The highest amount of correlation between swap to $OP Volume and price was on Jun 20 week with 0.83.

The highest amount of correlation between swap to $OP Volume and price was on Jun 20 week with 0.83.

2. Swap To $OP

1. Swap $OP (To and from)

Observation

when we look on swap Volume vs Price graph we can see three phases:

The first phase was when the price moved in a sideways trend without direction, that is, from June 14 to July 13, during this period, the volume of swaps and the average size of swaps had reached their lowest levels.

In the second phase, which started on July 14, we see a very good rise in the price, so that the price reached from $0.46 to $1.98, and we see that both the average swap size and the swap volume rose along with the price, but one point here It can be seen that the upward trend of Volume ended earlier than the price unlike the average swap size (seems that big hands know when they sell). This phase ended on Aug14.

In our third phase, which started on August 5th, we see a decrease in the price from its historical Top. Along with this decrease, we also see a decrease in the volume and average size of the swap, until recently the price has reached a side state, and the same as in the first phase. We are very low volume values

when we look on correlation coefficient we can see that this parameter is higher on swap volume that is mean the price have a stronger correlation with volume. Also with help of weekly correlation coefficient we can see that on Jun 07 week the correlation between Volume and $OP price reached the highest amount with 0.814, also on Jul 25 week the correlation between average swap size and $OP price reached the highest amount with 0.89

3. Swap from $OP