What is Osmosis?

Established in 2021, Osmosis is a multi-chain AMM built for the Cosmos ecosystem. The DEX (Decentralized Exchange) offers interoperability between blockchains using Inter-blockchain Communication Protocol (IBC) and Axelar, which facilitate the connection of blockchains within a decentralized infrastructure. AMMs (Automated Market Makers) are typically pools of digital assets managed by a smart contract used to enable decentralized trading. The liquidity pools and smart contracts replace the order book system; liquidity providers lock their assets into the pool and earn fees when people trade in these pools.

According to the left data, the total paid swap fees to the Osmosis liquidity pools during the past 30 days is 0.868M $USD.

Moreover, USDC/OSMO is the pool that has contributed the most to total swap fees paid, followed by ATOM/OSMO on the second rank.

We can also see MARS/OSMO (one of the recently launched liquidity pools on Osmosis) among the top fee generators.

The total paid swap fees to the Osmosis liquidity pools during the past 60 days is 1.76M $USD.

Moreover, Similar to the past 30 days, USDC/OSMO is also the pool that has contributed the most to total swap fees paid during the last 60 days, followed by ATOM/OSMO on the second rank.

The total paid swap fees to the Osmosis liquidity pools during the past 90 days is 2.32M $USD.

Moreover, Similar to the previos parts, USDC/OSMO is also the pool that has contributed the most to total swap fees paid during the last 90 days, followed by ATOM/OSMO on the second rank.

And based on the left data, the total paid swap fees to the Osmosis liquidity pools during the past 180 days is 5.68M $USD.

Moreover, Similar to the previos parts, USDC/OSMO is also the pool that has contributed the most to total swap fees paid during the last 180 days, followed by ATOM/OSMO on the second rank.

On the left chart, we can see the top 10 Osmosis liquidity pools of each week that have contributed the most to total swap fees paid.

As we see, USDC/OSMO & ATOM/OSMO have by far the highest dominance in all weeks and have generated the highest fees for Osmosis LPs. There is a close competition among liquidity pools for the next ranks,

According to the above charts, there is a positive correlation between daily paid fees to Osmosis liquidity pools & the number and especially (& obviously!) volume of swaps and also liquidity providing activity on this chain.

The correlation of generated fees vs swapping activities on Osmosis is more than liquidity providing actions.

The highest number of and also volume of swaps within Osmosis has achieved during 28th October 2022, this month is also the timespan when the highest fees was paid to the liquidity pools.

There is also another high spike of swapping activity on Osmosis during November 2022, during the FTX & Alameda collapse.

On the above charts, we can see the volume of daily paid fee to liquidity pools, volume of swaps on Osmosis and also the volume of liquidity providing actions on this chain over time, as well as the listing date of new assets on this chain (over the past 180 days).

So, we can not say that the listing of new assets on Osmosis is the main reason behind generation of high volume of swaps, LPs & fees on this chain since the tokens that have listed during October 2022 are not so popular but the generated volume on this month is way too high compared to the other days of the chart. This high volume can be mainly because of whole cryptocurrency market situation and on-chain volatiles because of overall movement of the cryptocurrencies (or high volatile days such as November FTX Collapse).

Anyway, On the left chart, I Have extracted the top pools that have contributed the most to total swap fees paid, during their FIRST MONTH of launch on the Osmosis zone.

As we see, LUNC/OSMO - AXL/OSMO & MARS/OSMO are 3 pools that their liquidity providers have paid the highest fee to LPs during their first month.

As we see, the generated swap fees on the majority of the above-analyzed pools have increased significantly after adding $OSMO incentives to them (compared to the days before that).

The impact of these proposals is visible shortly after being submitted and implemented on liquidity pools (more clear & simplified view on the left chart).

Summary & Conclusion

According to the above analysis, the volume of swap fees paid to the Osmosis liquidity pools has decreased slightly over time. During 90 - 180 days ago, the highest fees were generated and paid to the Liquidity pools but as time goes on, as the number and volume of swapping & liquidity providing activities on Osmosis have decreased, the paid fees to the Osmosis pools have also decreased over time. We can conclude that the daily generated fees have quite a positive correlation vs the swapping & liquidity providing activity in the Osmosis zone.

Anyway, USDC/OSMO & ATOM/OSMO are by far the 2 liquidity pools that have contributed the most to the total swap fees paid to the liquidity pools. But LUNC/OSMO pool has generated the highest fee during its first month of launch on Osmosis (among other pools which have launched on this ecosystem in the last 6 months). AXL/OSMO & MARS/OSMO were on the 2nd and 3rd ranks.

Adding OSMO incentives to a given pool (such as with Prop #408) has led to an increase in swap fees generated in all of the 8 analyzed pools in this dashboard. The impact of these proposals was visible shortly after being submitted and implemented on the liquidity pool.

The most impressive factor in the volume of swaps & liquidity provided (and as a result, the volume of generated swap fees) was the whole cryptocurrency market situation. The listing of new assets on Osmosis had also a little positive effects on these metrics but there was not the main reason. For example, one of the highest volumes of swaps & LPs & Fees were generated during November 2022, the timespan when FTX & Alameda collapse happened (but there were not any listed asset on Osmosis)

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

Definitions:

Liquidity Providing: A liquidity provider, also known as a market maker, is someone who provides their crypto assets to Osmosis to help with the decentralization of trading. In return, they are rewarded with fees generated by trades on Osmosis, 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.

Swap Fees: Swap fees are fees charged for making a swap in a Liquidity Pool (LP). The fee is paid by the trader in the form of the input asset. Pool creators specify the swap fee when establishing the pool. The total fee for a particular trade is calculated as a percentage of the swap size.

Dashboard Introduction

• In the first part of this dashboard, I am going to Examine swap fees paid to liquidity pools over the last 30, 60, 90, and 180 days to realize which pools contributed the most to total swap fees paid to LPs. Also, I am going to check whether are there any notable trends in swapping or LP activity over these time periods and what is driving these trends.
• In the second part, I am going to check whether adding OSMO incentives to liquidity pools (via proposals voting) leads to an increase in swap fees generated over the following days or no.

Analysis Date: Sunday | March, 5th, 2023

Does adding OSMO incentives to a liquidity pool lead to an increase in swap fees generated over the following 30, 60, 90 or 180 days?

The Osmosis governance sometimes decides to include some pools (such as AVAX pool OSMO/(w)AVAX (#899) in proposal #408) into the set of assets that receive OSMO liquidity incentives.

In this part, I am going to check the impact of submitting these types of proposals on the generated $OSMO fees for the liquidity pools over the following 30, 60, 90 & 180 days after submitting the related proposals.

For this purpose, I have analyzed the daily generated swap fees on 8 Osmosis liquidity pools, before (maximum 30 days) and after (30, 60, 90 and 180 days) submitting the proposal.

On the above charts, we can see the daily generated swap fees which are paid to Osmosis liquidity pools over time. As we see, The volume of generated fees during the last 180 days (Blue part) is more than other time periods.

As time goes on and especially during the “Last 90 Days” timespan, we can see a slightly decreasing trend of paid fees to Osmosis liquidity pools.

Methodology

The main tables that I have used for this analysis are Flipside’s osmosis.core.fact_pool_fee_day (the newly created table in order to extract the daily generated swap fees for liquidity pools), osmosis.core.ez_prices (in order to calculate the USD value of generated fees, swaps & liquidity providing actions), osmosis.core.fact_swaps & osmosis.core.fact_liquidity_provider_actions (in order to analyze swapping & liquidity providing activities on Osmosis).

The listing date of tokens & also the add date of pools to the Osmosis zones is assumed as their first day of activity on this chain.