What is Osmosis ?

It’s hard to explore Cosmos ecosystem today without first coming across Osmosis. Launched in June 2021, Osmosis is primarily a DEX but true-to Cosmos ethos of horizontal scaling by creating application specific blockchains, Osmosis is also a blockchain with DEX being the primary purpose. It has Inter-Blockchain Communication (IBC) built in and allows for swaps and liquidity pooling of IBC-enabled, Cosmos SDK assets.

Today, Osmosis is the top DEX in the Cosmos ecosystem by Total Value Locked (TVL), Daily IBC transfers and Daily Active Users. Although the TVL has come down significantly from its peak of ~$1.8B, it’s still the top application to come out of the Cosmos-ecosystem (excluding Terra which uses the Cosmos SDK but started out as a completely separate and unconnected blockchain).

Today, Osmosis is at the heart of the Cosmos ecosystem with a transaction to almost all the other chains in the ecosystem as can be seen from this Mintscan visualization.

Because osmosis is IBC-enabled, it allows for easy bridging to all the other Cosmos blockchains. One can easily deposit/withdraw another Cosmos blockchain’s native token via the DEX.

Staking on Osmosis

Osmosis blockchain uses the Proof-of-stake consensus mechanism used by to achieve distributed consensus. In this mechanism, network participants who want to validate the transactions are required to “lock” the network token/currency (OSMO) as collateral. The process of “locking” the tokens is known as staking. In return for validating transactions and blocks, these validators and delegators are rewarded with the native token based on the amount they have staked in the network.

Methodology

For this analyzing , I have used osmosis.core.fact_staking , osmosis.core.fact_liquidity_provider_actions , osmosis.core.fact_swaps

In this dashboard, I am going to analyze:

• The number of unstakers, number, volume and cumulative volume of unstake actions over time on Osmosis.
• The average day difference between unstake actions on Osmosis.
• The average amount of unstaked OSMO.
• Distribution of weekly and monthly OSMO unstakers on Osmosis.
• Distribution of next actions for unstakers (LP, Swap or Redelegate)
• Top 20 Osmosis validators
• Top 10 Validator for Redelegation users.

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In a Tendermint PoS blockchain there are actions a delegator can take:

1. ==Delegate== — The process of staking OSMO with a validator
2. ==Undelegate== — As the name implies, this is unstaking action and reverse of “Delegate” action. On Osmosis, the unstaking period is 14-days before the unstaked OSMO can be accessed.
3. ==Redelegate== — The process of changing the validator the OSMO is staked with. This doesn’t require the 14-day unstaking period and the OSMO can be immediately redelegated to another validator.

On the right chart, we can see cumulative volume of OSMO unstake over time.

we can see this growht rate is increasing over time,

In addition, at the beginning of August, this amount exceeded 1 billion. And to date, it has been more than 1.4 billion.

And on the left data, we can see Average volume unstaked OSMO by users which is about 927OSMO

Now, on the left, we can see the average time between unstake actions for Osmosis users.

this shows us how frequently do users on Osmosis unstake their Osmosis.

as we can see, the average difference between 2 unstake actions is 14.33 days.

As another method addition to above , on the above chart I have distributed the OSMO unstakers into 4 types by weekly timespan.

We can see that most number of Osmo unstakers by far (more than 76% of them) has unstaked OSMO only once a week.

After that, we have Users that unstaked their OSMO for 2 to 5 times within a single week.

totally less than 2% of users have performed more than 6 Osmo unstake actions within a week.

And as another method, I have analysed the monthly Unstake for Osmosis users.

As we see, similar to the previous chart, we can see most number of Osmo users have unstaked their asset only once in a month, after that, we have users who have unstaked their Osmo between 2 to 5 times within a month.

totally, almost 2% of users have performed more than 6 Osmo unstake actions within a single month.

On the left chart, I have analysed that what do the OSMO unstakers do with the OSMO once unstaked.

as we see, the most number of these unstakers have perform a swap.

we can conclude, when they unstake OSMO, maybe they change it to the fiat or stablecoins such as USDC.

after that, we can see users who provide liquidity with their unstaked OSMO.

and on the 3rd rank (with the least number), we can see only 15% of OSMO unstakers have Redelegate their OSMO.

since there may be some overlap between these 3 type of actions, there may be users who performed all of these 3 actions (swap, LP, redelegate) with their unstaked OSMO.

For the next part and to underestand Do the OSMO unstakers re-delegate to certain validators more frequently than others?, First, I have listed the certain validators as the left chart, (that we can see osmovaloper1clpqr4nrk4khgkxj78fcwwh6dl3uw4ep88n0y4 is the most popular one).

As we see on the left, the validator osmovaloper1ej2es5fjztqjcd4pwa0zyvaevtjd2y5w37wr9t is the most popular validator for Osmosis unstaker redelegators. (belongs frens army) to this validator is between the top 20 certain validator on the above chart.

After that, we have binary_holdings as the second popular validator for Osmosis unstaker redelegators.

In terms of number of unstake actions, we can almost see a similar chart and trends to the previous chart. as we see, the total trend of unstake actions was increasing till November, but after that, a decreasing trend is clearly visible on the chart.

On the above chart, we can see total number of OSMO unstaker users over time, as we see, the number of these users have increased dramatically during March 2022 and especially with the highest number on 12th March.

this trend was positive until March 2022, but after that, we have almost a light decreasing trend over time with some sudden high spikes on May and June. these high spikes were exactly at the time when the market price has crashed heavily and we can conclude that users had experienced fear of losing their money so they decide to unstake their OSMO

But in terms of unstake volume, we can see a different chart. we can see that OSMO unstake volume is almost a constant amount over time.

but the amount of unstaking has been increased since May & July 2022. after that, we can see several spikes.

What happens to OSMO after undelegation is completed?

Now, it’s time to answer the question of what happens to OSMO after the 14-day undelegation is completed.

Methodology

To answer this question, I needed to come up with a framework. I considered the following 3 actions of a delegator after their OSMO had completed unstaking:

1. LPing into a pool
2. Swap for other tokens
3. Delegating again to a validator

As I began exploring the actions that can be done, I came across a challenge — many delegators will delegate newly acquired tokens while previous tokens are undelegating. That leaves the question that at which point should you consider post-undelegation actions? To solve this dilemma, I only considered the latest redelegate action and the amount of OSMO redelegated. As soon as the post-action OSMO amount exceeded the undelegated total, I considered the amount of undelegated OSMO “spent” and closed the time-window of “what they did post undelegation?”. \n

But in volume provalidator & larry engineer

in First and second place respectively

each worth more than four million

Conclusion

In this analysis, I set out to look into the undelegating behaviors of OSMO stakers and what they do after undelegating. During this journey we found the following:

1. Large amounts of OSMO was redelegated in Jan-Mar timeframe following by large amounts of undelegations in Mar-May timeframe.

2. Majority of the undelegated OSMO (and in Mar-May) timeframe was swapped to other tokens.

3. Provalidator was the largest recipient of redelegated OSMO while

   Cosmostation (osmovaloper1clpqr4nrk4khgkxj78fcwwh6dl3uw4ep88n0y4) receiving the lions share of delegated OSMO after it was undelegated.

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