Osmosis chain and importance of fee:

Osmosis is an advanced Automated Marketer Protocol (AMM) that allows developers to build custom AMMs with robust liquidity pools. Osmosis is built using the Cosmos SDK and uses the Inter-Blockchain Communication (IBC) feature to enable cross-chain transactions. The Cosmos ecosystem follows the "Blockchain as Decentralized Program" architecture; This means that Osmosis is a blockchain connected to cosmos Hub, which is also a decentralized exchange.

Osmosis, with the help of IBC, connects to the entire ecosystem of Cosmos chains and their more than 10 billion dollars of native assets. After supporting active blockchains on the Cosmos hub, the project aims to connect to other chains such as Ethereum and Bitcoin.

Overview of analysis:

In this dashboard, the GAS tracker on Osmosis blockchain has been developed. In this analysis, the various actions on Osmosis have been identified to find out the metrics related to the Gas usage.

This dashboard divided into the following parts:

• Determination of Fee on Osmosis (General and over time)
• Which actions are responsible for paid fee?
• Compare paid fee on Osmosis with Cosmos and Terra

Methodology:

The data provided by Flipside has been used to handle this analysis.

• Used table:

  Osmosis.core.fact_transactions for each blockchain has been utilized to handle this analysis

  Fee estimation→ split(fee,'uosmo')[0]::numeric/1e6)

• Metrics:

  • Total amount USD of gas spent on the Osmosis
  • Average paid gas per block
  • Weekly amount spent on gas on Osmosis
  • Minimum, maximum and Median of gas usage in USD
  • Average gas usage in USD per day
  • The top 10 addresses on Osmosis that spend the most on gas

• Actions:

  • Staking, Transfer, Swapping, Providing LP and voting

Part 1: Determination of Fee on Osmosis (General and over time)

Part 4: Summary and references

Findings:

Now its time to compare the paid fee on Osmosis with Cosmos and Terra blockchains:

• Among selected networks for comparison, the Cosmos network has the highest total and average paid fee compared to other networks.
• The Osmosis network is the cheapest network compared to other networks and the Cosmos is the most expensive one among selected chains.
• The overtime analysis reveals that the average paid fee in USD on various networks is dominated by Cosmos and the Terra is the second network with higher average paid fee.
• The weekly paid fee on Terra passed the Osmosis after start of 2023.

Part 3: Compare paid fee on Osmosis with Cosmos and Terra

Findings:

This part is the most important part of this investigation and used to determine the impact of each action on the paid fee on Osmosis network:

• The most popular action that responsible for the highest share of paid fee on Osmosis network is Swapping action and the Transfer action stand in the second rank with 26.8% of paid fee.
• The maximum paid fee on single action happened on Staking action with over 102 USD per action.
• The average paid fee for various sections demonstrated that the Staking actions are expensive than other actions and the providing LP stands in the second rank.
• The highest paid fee for various actions on Osmosis occurred in the last week of March and first week of April 2022.
• The 7-day moving average paid fee shown that in the week that coincided with Terra collapse, the highest average paid fee occurred.

Findings:

This part is used to estimate the paid fee on Osmosis network and draw a pattern about spending fee on this chain:

• The Total paid fee on Osmosis network is about 232k USD so far.
• According to the results, the Osmosis network is one of the cheapest networks on crypto world and the average paid fee per transactions on this network is about 0.002 USD.
• The highest weekly paid fee on Osmosis network happened on April 4 to 11, 2022. Also on that date the highest average paid fee per block occurred on that date too.
• The trend of average paid fee in USD decreased since April 4 and the highest average paid fee with 0.007 USD occurred on April 4 to 11, 2022.
• The list of the users who spend more than other users on Fee in the Osmosis network reveals that the wallet in the first rank spend more than 6k USD for fee on Osmosis.

Part 2: Which actions are responsible for paid fee?

Conclusion:

Now lets drawn a conclusion from aggregation of outcomes on gas usage of various blockchains:

• As can be seen, the Osmosis blockchain has the lowest paid fee in USD among selected networks.
• The paid fee and average fee per transaction are two of the most important factors that affected the tendency of users on blockchains and the Osmosis network is one of the most suitable chains from paid fee point of view.
• Its not acceptable to compare the chains from total amounts point of view but the best way is to make comparison by average paid fee per transaction.
• According to the major responsibility of Osmosis network means AMM. So, the most popular action from the paid fee point of view is Swapping action.
• The most expensive blockchain to execute a transaction is Cosmos and the numbers related to transaction fee in USD are far larger than other chains.

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani

Useful links:

• Osmosis network
• About Gas fee
• Paid Gas on Osmosis

Importance of fee on networks:

Cryptocurrency transaction fees were originally introduced as an anti-spam tool in Bitcoin, but today they have become one of the most fundamental features of the blockchain network. In the Ethereum blockchain, the fee of transactions is determined by a concept called Gas, which is a small fraction of the ETH digital currency. This blockchain offers more complex features than the Bitcoin blockchain, such as smart contracts and decentralized applications, so transaction fees on the Ethereum blockchain play a more important role in the survival of the network.

Currently, there are many blockchain projects, each charging different fees as cryptocurrency transaction fees. There is a simple rule regarding the determination of fees for transactions in blockchains, and that is "the higher the efficiency of the network, the lower the cost of transactions." Considering that some networks can only put a limited amount of data in each block, as a result, the work of miners or validators is limited to the number of transactions for which they have enough space.

When many users simultaneously send their cryptocurrency transaction requests to the network, the demand for block space increases and more transactions await confirmation. In some cases, the demand for block space becomes so high that the networks become congested and transaction fees increase dramatically for a period of time.

On the other hand, the larger the number of transactions in the network, the higher the value of these transactions, the higher the fee is defined for them.