What is Mars Protocol?

Mars Protocol is An autonomous (smart-contract-based) lending protocol, it can run on computer code 24/7. It has the potential to accept any form of digital value for deposits and loans, from cryptos to LP tokens and beyond. Mars Protocol is a complete credit protocol that enables Terra native assets (mAssets, ANC, MIR) to be borrowed or used as collateral, thereby providing them with another valuable use case.

Like banks, Mars aims to attract deposits and lend out this money while managing illiquidity and insolvency risk. Unlike banks, Mars is a fully automated, on-chain credit facility governed by a decentralized community via a transparent governance process. All decisions are made by the Martian Council, composed of MARS stakers who put skin in the game to backstop certain kinds of protocol risk in exchange for a portion of the protocol borrowing fees. Mars Protocol is being developed by a joint venture among Delphi Labs, IDEO CoLab Ventures, and Terraform Labs.

$MARS is the native asset in the Mars protocol which can be used for staking, governance, liquidity providing, swapping, etc. Read More

Definitions

Liquidity Providing:

A liquidity provider, also known as a market maker, is someone who provides their crypto assets to Mars Protocol to help with the decentralization of trading. In return, they are rewarded with fees generated by trades on Mars, which can be thought of as a form of passive income.

Swapping:

Crypto swapping allows users to easily exchange one cryptocurrency for another, with no crypto-to-fiat exchange required. Saving time and paying less in fees are obvious benefits. For example, using Osmosis DEX, users can easily use OSMO/MARS swap pair to exchange $MARS & $OSMO tokens with each other.

Red Bank:

The Red Bank is the lifeblood of Mars. An autonomous (smart-contract-based) lending protocol, it can run on computer code 24/7. It has the potential to accept any form of digital value for deposits and loans, from cryptos to LP tokens and beyond. Currently, There are 3 supported assets in Mars Protocol’s Red Bank: $OSMO, $ATOM, and $axlUSDC.

As like as many other newly launched tokens, $MARS has also experienced drop in its price during the first days of launch. on Feb. 2, 2023, $MARS price was 0.55$ but now and after like 3 weeks, this token’s price is down to 0.25 and lost almost 50% of its value from launch.

Moreover, the 24H volume of this token was at its highest amount during the first days of launch especially on Feb. 4, 2023 (2.109M) but after a while, the volume of this token’s transactions has declined dramatically to the extent that currently this token has almost 50k liquidity (almost 40x less volume than its highest amount!)

But, the $MARS liquidity is at a better situation. the liquidity of this token has increased from 284k on Feb. 2, 2023 to 2.27M on Feb. 4 (almost 10x growth). this factor has increased more and more over time and currently the liquidity of $MARS token is 3.21M.

So, the popularity of $MARS token has decreased over time and the highest peak of $MARS-related transactions volume and also highest price of $MARS token has achieved during the first days of its launch.

$MARS Token

Overview of Actions (Liquidity Providing, Swapping, Red Bank)

According to the left chart, swap actions via $MARS token is by far the most popular made action via this token and has also attracted the most number of users to itself. the second rank belong to the Red Bank actions (lending & borrowing ecosystem) and the least popular action is Liquidity providing.

Moreover, We can see Deposit is by far the most popular action in Mars protocol followed by Borrow.

According to the above charts, first of all, we can see a down-trend in popularity and usage of Mars Protocol and its related actions over time. on Feb. 17, 2023, there is a high spike of Red Bank actions and also significant number of new users who have used this protocol for the first time but again, the hype of users has declined after a while. Before Feb 17, the dominance of Swapping actions via $MARS token was at its highest amount (among other actions) but after this day, we can almost see the increasing popularity and dominance of Red Bank actions to the extent that we can kinda say that Red Bank-related actions are currently the most popular actions via MARS users. Currently, we can say that Red Bank deposit actions and swapping are the most popular actions among Mars users.

Totally, Feb. 4, 2023 was the highest peak of Mars-related actions by users (we have seen that highest 24H volume of $MARS token has also achieved on this day)

Based on the left chart, the majority of users have firstly performed Swap actions via $MARS token rather than Red Bank-related actions and Liquidity providing.

Moreover, nearly half of users have only performed Swap activities followed by users who have performed Liquidity providing & swapping actions via Mars.

There are only almost 7% of people who have done all 3 possible actions which is a low share.

Liquidity Providing

Currently, There are 2 $MARS-related Liquidity Pools in Osmosis:

Pool ID #907: MARS / OSMO

Pool ID #916: NGM/MARS

MARS/OSMO has way more liquidity & popularity than NGM/MARS.

As mentioned above, the popularity of MARS/OSMO pool among Osmosis users is way more than NGM/MARS in all terms of number of transactions, users and volume of liquidity provided.

On the right chart, we can see the daily accumulated Mars pools’ fees which are decreasing over time, which shows the decreasing activity of actions in these pools.

Swapping

Based on the first section analysis, Swapping is the most popular action via $MARS token. In this part, I am going to provide a more-detailed overview of swapping actions related to the $MARS token.

According to the above charts, the popularity and volume of swapping actions via $MARS token in Osmosis is also decreasing over time and the highest peak achieved on Feb 2, 2023 with more than $2.28M swap volume via this token.

MARS/USDC is by far the most popular $MARS-related swap pair in Osmosis followed by MARS/OSMO and ATOM/MARS in the next ranks. Also, we can see the daily %wise share of $MARS swapping pairs’ volume in Osmosis over time and the dominance of MARS/USDC pool is clearly visible in most days.

The more popularity of MARS/USDC than USDC/MARS pool meaning that the majority of swapped volume are FROM $MARS to $USDC (selling $MARS) which can not be good news for this token.

Red Bank

The Red Bank is the lifeblood of Mars and the main reason that the Mars protocol was created. This protocol is An autonomous (smart-contract-based) lending ecosystem that can run on computer code 24/7. It has the potential to accept any form of digital value for deposits and loans, from cryptos to LP tokens and beyond. Currently, There are 3 supported assets in Mars Protocol’s Red Bank: $OSMO, $ATOM, and $axlUSDC.

In this part, we are going to check how have Osmosis users have welcomed Mars Protocol’s Red Bank:

Inflow Volume = Repay + Deposit

Outflow Volume = Borrow + Withdrawal

From the above chart, we can conclude that the main activity of the Red Bank protocol started on Feb. 18, 2023. Before this day, there were way low outflow & inflow volumes on Mars Protocol Red Bank (just a semi-high activity on Feb 7, 2023) but on Feb 18, 2023, we can see a significant high spike of inflowed volume into Mars Red Bank (more than 8.47M $USD) and during the days after this date, there is a decreasing (but still more than first days of the chart) trend of inflow & outflow volume on Red Bank.

Totally, the good news is that the overall net flow in Red Bank is increasing over time meaning that there are more and more inflowing assets by users to this protocol. on Feb 7, 2023, the net flow of assets in Red Bank was 3.08M $USD, this amount slightly decreased till 18th February but with that high spike of inflowed volume into Red Bank on this day, the total net flow of Red Bank has increased to 7.35M $USD.

On the left chart, we can see the daily utilization rate of Red Bank for each asset over time. The utilization rate of USDC asset is more than OSMO and ATOM while $OSMO has the least utilization rate on all days.

> Each asset in Red Bank is characterized by its utilization rate which represents the share of borrowed liquidity: As the Utilization Rate gets closer to 100%, the capital becomes scarcer until no liquidity is left at 100% rate. This situation can be problematic if depositors wish to withdraw their liquidity, but no funds are available.

So, based on the above text, $OSMO has the best situation (lowest utilization rate) and USDC has the worst.

On the right chart, we can see the daily distributed volume of Red Bank rewards to users over time. the highest volume was claimed on 18th February (the most active day of Red Bank) and the total trend line is slightly increasing over time.

Methodology

The main tables used for this analysis are new released Flipside’s Mars EZ tables:

• osmosis.mars.ez_liquidity_provider_actions: for liquidity providing actions
• osmosis.mars.ez_redbank_actions: for Red Bank related actions.
• osmosis.mars.ez_swaps: for Swapping actions.
• osmosis.mars.ez_pool_hour & osmosis.mars.ez_pool_fee_day: for analysing MARS liquidity pools.
• osmosis.mars.ez_token_day: for analysing the daily stats of $MARS token.

+ osmosis.core.ez_prices table in order to calculate the $USD value of transactions. I have also extracted the currencies’ symbol and their decimal (in order to adjust the volume of transactions) from this table.

Moreover, I have just considered Successful transactions in this analysis: tx_succeeded = 'TRUE'

Dashboard Introduction

In this dashboard, I am going to analyze different activities via Mars Protocol and also via its $MARS token in Osmosis. The main goal of this dashboard is to realize how have Osmosis users have welcomed Mars protocol and its native token, $MARS, since its launch.

In this analysis, I have defined 3 different actions which are possible via Mars protocol & $MARS token:

1- Liquidity Providing

2- Swapping

3- Red Bank (Lend & Borrow)

Firstly, I am going to provide and overview of these 3 actions and the popularity of them since Mars project launch. Then, I am going to seperately analyze each protocol in 3 different parts.

But first of all, I am going to analyze $MARS token price change as well as its daily liquidity & 24H Volume since its launch.

Summary & Conclusion

According to the above analysis, Users have well-welcomed Mars Protocol and also its native token, $MARS, during its first days of launch but, as time goes on, the total number and volume of all kinds of actions and also the number of active & new users in this protocol has decreased over time. The majority of these users have only performed Swap transactions via $MARS token and there are only 3 users that have performed all 3 type of actions (liquidity providing, Red Bank lending & borrowing, Swapping).

The price of $MARS token was at its highest value on the first day of its launch but as time goes on, the price of this token has also decreased significantly and currently, $MARS has experienced a 50% drop in its price (compared to the first days).

The 24H Volume of $MARS token in Osmosis has also decreased over time but the liquidity of this token remained steady.

Swapping was the most popular action via $MARS token among Osmosis users and the main destination of swaps with this token was $USDC asset. As time goes on, the dominance of Red Bank actions in Mars Protocol is increasing to the extent that during recent days, Red Bank (mainly deposit) actions is the most popular activity via Mars.

February 4, 2023 was by far the most popular day for swapping and liquidity providing via $MARS token. On the other hand, 18th February was the highest peak of Red Bank-related actions to the extent that after this day, the dominance of Red Bank actions has totally overtaken the other 2 actions. On this day, the highest volume of assets was removed from MARS liquidity pools, maybe in order to use them in Red Bank instead of Liquidity Pools.

OSMO/MARS pool is the most popular Liquidity Pool of $MARS token. MARS/USDC is the most popular swap pair and $OSMO is the most popular asset in Mars Protocol’s Red Bank.

The utilization rate of all assets in Red Bank is increasing over time which can not be good news for this protocol. anyway, $OSMO has the least utilization rate while USDC has the highest.

**Discord: Ali3N#8546 Twitter: Alik_110 Email: Alik110.72@Gmail.com Check out My Other Dashboards at: **

in the left chart, we can see the daily liquidity and volume of MARS pools over time. Similar to the $MARS token (in the first section), the 24H volume of $MARS-related pools in Osmosis is also decreasing over time but the liquidity is increasing and has remained steady during recent days.

in the right chart, we can see the daily volume of provided liquidity in Mars pools over time and the decreasing trend is clearly visible. Also, there are some high spikes of removing liquidity from Mars pools (pool_exited) during 18 - 23 February. In the previous sections, we have seen that the activity over Mars Red Bank has increased significantly on these days. So, we can conclude that maybe users were withdrawing their assets from liquidity pools in order to use them in Red Bank.

According to the left charts, deposit is by far the most popular action in Mars Protocol Red Bank followed by Borrow on the second rank. Repayment is the least popular action ($Volume).

Moreover, we can see the highest spikes of Red Bank actions (8th & 18th February) belong to the Deposit & Borrow actions over time.

Totally, the daily volume of all actions on Red Bank is decreasing over time.

According to the above charts, OSMO is the most popular asset in Red Bank followed by ATOM on the second rank, and USDC is the least popular asset in this protocol.

The total number of transactions, users, and also total volume of actions in Osmos is more than other assets. The current net $USD balance of the OSMO vault is also more than the other 2 assets (12.51M $USD).

in all of 3 Assets, the volume of deposits is more than other actions followed by Borrowing actions. $OSMO has the highest volume of deposits, borrows, repayments and also withdrawal actions among these 3 assets.