Question:

Analyze Optimism during the month of July as markets were get turbulent, showing whatever metrics you care to unearth.

You can choose any topic you’d like: How did the network perform? What about market performance? Were there significant inflows or outflows on bridges? Were there any notable patterns in user behavior?

Overview of essay:

In this essay, we are going to study the Optimism during the month of July which know as a Bear market. For this purpose various metrics have been utilized to assess the performance of Optimism.

This analysis divided into the following parts:

• Network performance
• Analysis on DEXs
• Investigation on DeFi programs
• Bridge analysis on Optimism
• NFT sale on Optimism

Bear market:

The occurrence of a downward trend in price charts usually reduces the mood of investors and their interest in the market. It is said that the term bear market is taken from the way bears fight, which pulls itself up and then attacks downwards with all its weight.

==During a bear market, the economic situation is also weak and the hiring of companies decreases.== These conditions can be the result of faulty financial laws, political turmoil, bursting of market bubbles or even natural disasters.

Usually, in bear markets, traders try to buy digital currencies at the price floor and hold them until the next upward trend in order to sell at a high profit. But recognizing the price floor is not an easy task and sometimes the trader may lose from his purchase.

==Bear markets, unlike bull markets, fall sharply even with small news, and investors may panic and sell all their cryptocurrencies for fear of losing their assets and make the downward trend even more bearish.==

On of the main features of Bearish markets is reduction in investor confidence, High supply despite low demand, Distrust of economists towards digital currencies, Weak price rise with good news and a sharp drop in price with bad news.

Optimism network:

Optimistic is one of the most famous second layer solutions of Ethereum, which is provided with the aim of making Ethereum more scalable. This second layer solution increases the speed of transactions in the Ethereum network and significantly reduces the cost of transactions or transactions. In this solution, Ethereum network transactions are processed in the second layer and only the information of that transaction will be stored on the main Ethereum network. As a result, the security of this solution is provided by the Ethereum main network, which increases the reliability of this method. Various ideas have been introduced to provide Ethereum layer two solution, among which, solutions that use rollup technology, whether ZK rollup idea or optimistic rollup idea, have higher security and efficiency compared to competitors.

This solution uses a smart contract. In order to use this layer two solution, people must first transfer their digital assets from layer one, the Ethereum network, to layer two, the Optimism network. This transfer is done by smart contract.

The main advantage of using Ethereum second layer solutions is that you can pay much lower fees while using programs and platforms launched on the Ethereum network.

Part 1: Network performance

Findings:

The notable patterns related to the network performance of Optimism have been summarized as below:

• The count of transactions and active wallets were at their lowest level until the last four days of July which have increasing pattern.
• The count of newcomers on July decreased dramatically and it ==shown the unwillingness of crypto users on exploring new networks like Optimism.
• During month of July, the highest count of newcomers occurred on July 27 with 34.4k unique wallets.
• The average transaction per user is one of the important metrics can be used to analyze the behavior of users.
• The average transactions per users have been more than other days during month of July and its because, no intention from newcomers and only experienced wallets made transactions so the average transaction per wallet has been enhanced.
• The paid fee follows the same pattern as count of transactions and in the first days of July reduced dramatically but in the last days of July enhanced considerably.
• The success rate of transactions on Optimism during month of July did not change considerably and we could say that follow the same pattern as it worked on the other days.

Part 2: Analysis of DEXs

Findings:

On of the most important part of each network is DEXs. The application of DEXs are very vital and can play a decisive role on analyzing network during special circumstances.

• The application of DEXs during month of July has been enhanced as can be seen in the related graph.
• Also, the count of unique swappers that interacted with DEXs enhanced too.
• The highest utilization of DEXs by Optimism users occurred on July 29th.

As a leading DEX on Optimism, the Velodrome has been analyzed among users during month of July.

• The application of Velodrome has been enhanced during month of July, too.
• To understand this action by Optimism users, first we should use the features of Bear market and find the reasons of this enhancement in application of Velodrome.
• Like said on Bear market, the investors confidence has been reduced and they want to keep their assets on safe coins like stablecoins. So they decided to swap their assets into the stable coins to avoid market downturn.

Part 3: Analysis of DeFi programs

Findings:

In this part, the application of DeFi programs have been investigated from count of transactions and unique users points of view.

• The application of DeFi programs on Bear market during month of July has same pattern as other days and in general did not changed so much.
• As can be seen, the application of DeFi programs has been increased since last week , September and compared to Bear market (July) the usage of these programs enhanced considerably.
• The most popular DeFi program on July (bear market) is Perpetual protocol as can be seen.

Part 5: NFT purchase on Optimism

Findings:

In the final part, lets talk about the NFT sale on Quixotic marketplace on Optimism.

• The count of sale and unique buyers of Quixotic marketplace have been increased during month of July as can be seen from the related graphs.
• The highest sale volume in USD occurred on July 1st with over 144k USD by 902 unique purchasers.
• Despite July 1st, the average sale price of NFTs on Quixotic has been reduced during month of July in comparison with other days.
• In middle of July as a Bear market date, the application of Quixotic NFT marketplace has been reduced as well as count of unique purchasers.

References and useful links:

• Optimism DOCs
• Report on Bear Market
• Optimism explorers: Scanner

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani

Methodology:

To handle this investigation, the Data provided by Flipside community has been adopted, accordingly.

The data related to Optimism network have been shown by optimism.core tables on Flipside. The sub-parts of this mentioned table have been utilized by its application:

• Most of the parts executed on fact_transactions table.

• The application of various sectors handle by labeling the destination by the use of dim_labels tables.

• The LABEL_TYPE used in this essay are dex, defi and layer2.

• The velodrome swaps handle by velodrome.ez_swaps table.

• The NFT sale on Quixotic has been estimated by the use of ez_nft_sales table.

• Use case for Month of July and other days like:

  case when BLOCK_TIMESTAMP>='2022-07-01' and BLOCK_TIMESTAMP<'2022-08-01' then 'In July: bear market' else 'Other days' end as days

Time basis of this analysis depends on the parameter selection of reader and by default selected the weekly basis.

Part 4: Analysis of Bridge

Findings:

• The application of Layer2 (bridge) on Optimism has been reduced dramatically as can be seen from both graphs.
• Also, the number of users interacted with Layer2 programs diminished at its very small numbers.

Conclusion:

• During month of July, the application of various programs on Optimism have been decreased.
• Most of the users bridged their assets from Ethereum to Optimism network.
• On the final days of July, the application of sectors increased and things had become normal.

Findings:

• During month of July (bear market) the USD volume of bridge from Ethereum to Optimism is more than Optimism→Ethereum.
• On July 6 over 30 million USD have been bridged from Optimism into the Ethereum network and this can be considered as huge spike.
• In the second half of July, the bridge volume from Ethereum to Optimism has been followed the increasing trend overtime.
• The 7-day moving average bridge volume from Optimism to Ethereum is more than other path during July.

Findings:

Now lets dive deeper into the NFT purchase on July (bear market) and see how users handle the process:

• In the last week of July, the sale number and volume in USD for NFTs on Optimism have been increased dramatically and the main reason of that is because of finishing bear market and users wants to investigate on NFTs o Optimism more.
• The most popular NFT collection on July (bear market) are OptiPunk, Apetimism and Oliens.
• The highest sale volume in USD during July occurred for sales with 0.1-1 ETH sale price.