Try Quests to earn cryptoVelodrome Health
Lets take a look at the health of Velodrome a trading and liquidity marketplace on the Optimism blockchain.
Introduction
Velodrome brings a refreshing approach to how Dexs work, deployed on the relatively young Optimism blockchain you can use it to trade tokens, benefiting from low fees, low slippage but wait there is more…..
You can earn trading fees through voting with your tokens, as well as being able to benefit from locking tokens in addition to the traditional route of providing liquidity to users swapping on their Dex. These different features incorporate OHM’s 3,3 theory into a DEX, with the bike image on the right visualising the relationships between them.
Velodrome was hacked on August 4th, it is important to factor in when looking at the dashboards below, the explanation of the hack is shared in the tweet to the right, for those interested in learning more read the rest here.
Let’s dive into some key stats surrounding the protocol and see how it has performed in the month to date.
For the chart Number of large holders of Velodrome, Mogul = Holdings over 1 million USD, Whale = Holdings Over 100,000 USD, Shark = Holdings over 10,000 USD and Fish = Holdings Over 1000 USD.
Methods
Data is taken from the FlipsideCrypto velocity app using SQL code to collect data for the charts in the dashboard, I have used a number of tables in the optimism.velodromedatabase. Feel free to click the arrow on charts to see the accompanying code used.
Data is selected for all time(as the protocol data goes back to early June 2022) unless stated otherwise in the chart title.
LP stands for Liquidity Provider, DEX - Decentralised Exchange, and $Velo - Velodrome Crypto.
Voting action has increased despite the reductions seen in other areas of the protocol, users who vote can benefit from 100% of trading fees with the proportion of fees based on how many tokens they stake by voting, Interesting the largest vote action seen on a day was 1256 Unvote seen on the 11th of August.
Velodrome deposits have also suffered with investors depositing less than in July, in July deposits peaked at 19.21 million, the highest day of deposits in August is 3.4 million and 82% reduction in deposits. Users who lock tokens are generally more informed about the inner working of a protocol, so this could indicate a change in sentiment of more advanced users.
Summary
Overall it looks like the hack has impacted the sentiment of a variety of users on the platform, leading to lower averages this month when compared to the year-to-date for lock deposits and LP deposits. The platform given the widespread news of the hack however has still maintained relatively good volume on the Dex overall. Let’s look at some findings from the wider dashboard:
Velodrome has a number of whales 48, with 2 moguls holding over 1 million USD in value in their wallets, showing that more wealthy investors are happy to leave value in the protocol despite the hack.
There has been an increase in lp withdraws, which could hurt Velodrome long-term as a key focus of the protocol is on onboarding other cryptocurrencies with the prospect of attracting LP providers.
This is a very young cryptocurrency, with the hack having impacted the overall health of the platform and the price of the token negatively, dipping 74% from the ATH seen on July 29th.
Velodrome has a number of novel features that set it apart from other DEXs which will hopefully help the protocol over time.
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Liquidity providers are withdrawing from their positions, with the highest value of withdrawls seen on the day of the hack on the 4th of August. Liquidity providers could be attempting to avoid any issues related to impermanent loss, and with the drop of the Velodrome token by 71.48% exposing liquidity providers for Velo to that risk.
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Max swap sized peaked on the 15th of August with a swap totalling 1.45 million in USD. avg swap size has increased from the initial launch of Velodrome. Overall investors are making larger swaps as the protocol matures.
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In comparison to Uniswap, Velodrome maintains a lead in terms of the number of swaps on Optimism, with users preferring the platform and Uniswap usage being closely tied to the drop in usage on Velodrome.
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Swap volume looks to have suffered an overall decline when compared to the end of July. From August the 11th to August 17th dex swap volume has declined by 85%.
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The price of Velo has seen a 71.48% decrease since the all time high on the 29th of July. The loss of value likely has a relationship with the news of the hack being widely shared after the 4th, with the Twitter announcement shared in the introduction tweeted on the 14th of August.
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The holders with the highest value of tokens held are Whales, holding over 10 million USD in value between 48 whales. 2 Moguls holding over 1 million dollars worth of value of Velo each, signalling their faith in the crypto. There are more Sharks, and even more Fish with the value of their token holdings being more attainable.
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The majority of holders hold less than 12k tokens, we see a larger grouping of holders around the 100 dollar mark indicating that that is the preferred holding amount for the average investor.
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Transfer inflow has dropped since peaks in late July however, we see that after recovering from low transactions inflow on the 4th of August inflow has increased, increasing by over 684% from lows seen on the 5th to today.
