What is Osmosis?

Osmosis is an automated market maker (AMM) built on Cosmos that enables cross-chain transactions through Inter-Blockchain Communication (IBC). This gives the protocol an added layer of interoperability and composability.

Osmosis was created by Singapore-based Osmosis Labs, founded in 2021. Both co-founders, Sunny Aggarwal and Josh Lee, helped develop Tendermint, which is the core technology of Cosmos. Tendermint is one of the most widely used consensus engines in blockchain software.

OSMO is the native token of the Osmosis network. Primarily, $OSMO is used for staking to secure the Osmosis chain. As a PoS token, OSMO is inflationary. Over time, new tokens will be minted and entered into circulation. The maximum number of OSMO tokens has been set at 1 billion.

Liquidity Pools and Superfluid Staking

LP stands for liquidity pool or liquidity provider. Centralized exchanges typically use order books that rely on market makers to facilitate trades, whereas decentralized exchanges (DEXs) like Osmosis are typically powered by automated market-makers (AMMs). In an AMM, tokens exist in liquidity pools (usually pairs, though some protocols have multi-asset pools), where they can be automatically traded.

DEXs need people to deposit tokens into these liquidity pools so that trading can occur with minimal price impact–where orders make the price substantially worse than the quoted price. Pools usually charge a trading fee, but because of impermanent loss (the difference in value between assets deposited in a liquidity pool and those assets had they not been deposited, and more colloquially, the opportunity cost of using half, usually, of your funds to buy the paired asset in a pool), liquidity providers would generally not be willing to provide assets without incentives.

When you provide liquidity in an OSMO liquidity pool like ATOM/OSMO, you provide 50% ATOM and 50% OSMO. When you bond/lock that LP position, you earn fees and liquidity mining incentives for helping to facilitate trading in the pool. Before superfluid staking, that was the end of it. Your OSMO could not otherwise be re-used. But now, the locked OSMO can be tracked by Osmosis and used to help secure the chain.

Superfluid Staking

Superfluid Staking is the biggest advance in Proof of Stake since validator slashing. It was developed on Osmosis and, for now, exists only here. It is a method of staking the OSMO tokens that underlie your LP (liquidity provider) positions.

Liquid staking solutions for proof-of-stake assets exist, but they tend to:

1- undermine the ability of a blockchain to slash bad actors

2- create new centralized points of failure

3- create new prefixed assets that muddy user experience and fragment liquidity across many pools, leading to poorer trade execution.

Superfluid staking can also be thought of as reverse liquid staking. Instead of creating synthetic representations of staked assets (as with regular liquid staking), superfluid staking allows staking tokens already being used in DeFi to be staked.

Methodology

In this dashboard, I am going to analyze the liquidity of staked $OSMO across Osmosis superfluid staking pools since the start of the year 2023. For this, I am going to extract the distribution of superfluid-staked OSMO across these pools and also identify the top validators.

Thanks to the Flipside’s hint, we know there are currently 19 SuperFluid Staking pools on Osmosis which are pool IDs 1, 678, 704, 712, 674, 722, 9, 604, 497, 812, 584, 3, 481, 42, 463,15, 840, 789 & 605. (Pool IDs 789 & 840 were added as Superfluid staking pools in 2023 after successfully passing proposals #405 & #398 ).

I have considered SuperFluid Staked $OSMO across pools to see how this token is distributed among them (the more $OSMO being held by a single validator = the less negative impact of slashing & also the more $OSMO dedicated to pool = the less negative impact of slashing on that pool)

Since the price of LP tokens on each pool is in different currencies, I had to calculate volume in $USD. For this, I have used osmosis.core.dim_prices (joining with osmosis.core.dim_labels) table.

Moreover, The main tables that I have used for this analysis are osmosis.core.fact_liquidity_provider_actions & osmosis.core.fact_swaps by filtering the pool_ids to the superfluid staking pools (19 pools mentioned above).

Pools

• Pool ID #1 = ATOM / OSMO
• Pool ID #678 = USDC / OSMO
• Pool ID #704 = WETH / OSMO
• Pool ID #712 = WBTC / OSMO
• Pool ID #674 = DAI / OSMO
• Pool ID #722 = EVMOS / OSMO
• Pool ID #9 = CRO / OSMO
• Pool ID #604 = STARS / OSMO
• Pool ID #497 = JUNO / OSMO
• Pool ID #812 = AXL / OSMO
• Pool ID #584 = SCRT / OSMO
• Pool ID #3 = AKT / OSMO
• Pool ID #481 = EEUR / OSMO
• Pool ID #42 = REGEN / OSMO
• Pool ID #463 = NGM / OSMO
• Pool ID #15 = XPRT / OSMO
• Pool ID #605 = HUAHUA / OSMO
• Pool ID #840 = WBNB / OSMO (Added in 2023)
• Pool ID #789 = WMATIC / OSMO (Added in 2023)

From 1st January till today (1 February), the total withdrawal volume from Osmosis SPS pools is more than deposited volume into them. So, the net volume is negative (-16.81M $USD) and this can not be good point for Osmosis ecosystem.

Breakdown by Pool

According to the left chart, OSMO/ATOM, OSMO/USDC, OSMO/WETH & OSMO/WBTC are the 4 most popular superfluid staking pools in Osmosis in order.

As we see, ATOM/OSMO has the highest deposit & also withdrawal volume since the start of the year 2023 but the negative net volume of USDC/OSMO pool is way more than other pools because this pool has very high withdrawals.

Except the 4 mentioned superfluid staking pools, the superfluid staking activity on other pools is so low.

The interesting thing is that popularity of recently launched staking pools such as WMATIC & WBNB /OSMO pools is higher than some old pools such as AKT/OSMO , XPRT/OSMO & …

According to the left charts, the majority of deposit actions in all pools have done with less than $10 volume followed by deposits with $10 - $100 volume.

On the other hand, we can almost see equal share of withdrawals with less than $10 , $10 - $100 & $100 - $1000 volume in all pools.

So, totally we can say that Withdrawal actions are done with more volume than Deposits.

According to the above charts, The highest peak of Superfluid staking actions on Osmosis pools have achieved during 16 - 18 January 2023.

Moreover, we can see that activity over these superfluid staking pools has decreased significantly during the last days of January (compared to the first half of this month) which shows the decreasing popularity of superfluid staking on Osmosis over time.

As we see, the highest volume was deposited into Osmosis superfluid staking pools on 16th January and on the other hand, we have seen the highest spike of withdrawals on 18th january. Also, in almost all days especially during these 2 mentioned high spike days, ATOM/OSMO has the dominance over other pools. The interesting thing is that high spike of withdrawals on 18th January has occurred mainly because of withdrawals from USDC/OSMO pool. Totally, we can see ATOM/OSMO & USDC/OSMO have the lead in almost all days.

Validators

On the above charts, we can see the top 10 validator of each pool with most total SFS OSMO since the start of the year 2023.

We can see in most of pools, Shapeshift DAO is by far the most popular superfluid staking pool in the most popular pool (ATOM/OSMO) and we can see its big difference vs other validatotors of this pool. So, in this part we have realized that the main dominance of Shapeshift DAO validator is because of its popularity on ATOM/OSMO pool.

The interesting thing is that there are various popular validators among superfluid staking pools in Osmosis and this can be good point of decentralization and “health” of superfluid staking pools in Osmosis.

According to the above charts, the average value of SFS assets in validators in the year 2023 is $3900.

The majority of validators have $1000 - $10000 SPS assets into them during the year 2023 followed by validators with less than $1000 volume.

Moreover, we can see the share of SFS assets in validators in most of the pools is less than $1,000 followed by $1,000 - $10,000 SFS OSMO in the majority of pools.

In our top pool (#1: ATOM/OSMO), We have the highest share of validators with more than $1000 SFS into it which shows the high popularity of this pool.

Summary & Conclusion

• The total net volume (deposit - withdrawal) in Osmosis superfluid staking pools in 2023 is negative which is not good point for this ecosystem.
• Pool ID #1 (ATOM/OSMO) is by far the most popular pool for SFS OSMO since start of the year 2023 and totally is the safest pool to superfluid stake assets into it.
• ATOM/OSMO has the highest deposit and withdrawal volume but the highest negative net volume belong to the USDC/OSMO pool since the withdrawals from this pool is way more than deposits.
• The highest peak of SuperFluid Staking on Osmosis in the year 2023 was during 16 - 18 January and after this time period, the popularity of this action has decreased more and more over time (as well as the deposit volume, withdrawal volume, LP tokens’ price).
• Shapeshift DAO validator was by far the most popular Superfluid Staking validator in Osmosis since the start of the year 2023. almost 37% of the total superfluid staked assets in 2023 was deposited into this validator and the other 67% is distributed among many other Osmosis validators! Since the start of the year 2023, almost 1.49M $OSMO was deposited into Shapeshift DAO validator while the second popular validator (notional) has only 444k staked $OSMO into it.
• Cosmostation (the top all-time popular validator in Osmosis) has not attracted so many $OSMO into itself and we can see it is on the rank #11 in this ranking since start of the year 2023.
• The popularity of recently launched superfluid staking pools such as WMATIC/OSMO , WBNB/OSMO (launched in this year) is more than some old validators like XPRT/OSMO or REGEN/OSMO & etc.
• Totally, In my opinion, $OSMO is well-distributed among validators in the majority of pools. this means that the risk of slash events to negatively impact the liquidity of a pool is not high. Moreover, the top validators in the majority of pools do not hold a high share of the total SFS to be at the risk of a negative impact of slashing events.

Discord: Ali3N#8546 Twitter: Alik_110 Email: Alik110.72@Gmail.com

Daily Over-Time

The interesting thing here is that Shapeshift DAO validator was by far the most popular Superfluid Staking validator in Osmosis since the start of the year 2023. As we see, almost 37% of total superfluid staked $OSMO in 2023 was deposited into this validator and the other 67% is distributed among many other Osmosis validators!

Since the start of the year 2023, almost 1.49M $OSMO was deposited into Shapeshift DAO validator while the second popular validator (notional) has only 444k staked $OSMO into it since the start of the year 2023.

The interesting thing is that Cosmostation (the top all-time popular validator in Osmosis) has not attracted so many $OSMO into itself and we can see it is on the rank #11 in this ranking.