Question:

Compare the market share of Sushiswap and Uniswap on the following L2 chains.

Polygon, Arbitrum, Optimism. Use measures such as number of trade or number of swaps, etc.

Overview of analysis:

In this investigation, the application of Sushiswap and Uniswap on Layer2 chains have been analyzed.

The overview of this study contains the following parts:

1. First, the application of Sushiswap and Uniswap have been analyzed individually on various netwroks like Polygon, Optimism and Arbitrum.
2. Secondly, the comparison and one to one study of Suhiswap and Uniswap have been done for each network by:
   • Application count
   • Users interaction on daily basis
   • How often users interacted with these DEXs.

About Sushiswap:

Sushiswap is the newest liquidity pool platform in the field of DeFi. This platform is a community-based decentralized exchange and automatic market operator that people can participate in its management through voting. Using this platform, people can add their tokens to liquidity pools (liquidity providers) and earn rewards in return. The platform allows anyone to provide liquidity and in return, these people are rewarded with tokens.

About Uniswap:

The Uniswap platform is a decentralized exchange (DEX) based on the Ethereum network, where people can exchange ERC20 tokens. Uniswap works by using liquidity pools, and people invest in these pools and provide liquidity for various token transactions, called liquidity providers. These liquidity providers, in return, are rewarded and share in transaction fees.

Layer2 chains:

Blockchain has many advantages as one of the most practical technologies of today. But one of its problems is its scalability and low transaction speed. Layer 2 solutions seek to solve this problem. One of the proposed solutions for the mentioned obstacles is the launch and development of the second layer of blockchain. Blockchain layer 2 is a set of solutions created outside of the main blockchain network in order to increase the scalability and efficiency of a network.

A common feature of Layer 2 solutions is that they take most of the work off-chain and use a permission-less network to ensure security. These solutions seek to solve the challenges that the current networks are currently facing; It means speed, scalability and high energy consumption. The use of layer two solutions causes a large amount of the load of the main network or the first layer to be transferred to the second layer. With this, the first layer still provides network security and the second layer improves the speed and scalability of the network. Our focus in this article is on the introduction of layer 2 solutions in the two most well-known blockchain networks, Bitcoin and Ethereum.

On Ethereum blockchain, various networks like Polygon, Optimism and Arbitrum have been introduced as Layer2 chains.

Methodology:

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

• The application of Sushiswap on chains

  from chain.core.fact_event_logs s

  left join Optimism.core.dim_labels b on s.CONTRACT_ADDRESS=b.address where PROJECT_NAME ilike '%sushiswap%'

• The application of Uniswap on chains:

  where PROJECT_NAME ilike '%Uniswap%'

• Users by interaction count

  when no_swaps=1 then '1 time user' when no_swaps>1 and no_swaps<=5 then '1-5 times use' when no_swaps>5 and no_swaps<=20 then '5-20 times use' when no_swaps>20 then 'Over 20 times use'

  \

Part 1: Sushiswap on L2s

Findings:

First of all lets look at the activity of Sushiswap on L2 chains:

• According to the outcomes, the Polygon network has the highest usage for Sushiswap among other chains from all aspects.
• After Polygon, the next rank belong to Arbitrum as can be seen.
• According to the Flipside data, the Sushiswap has been added to blockchains like:
  • Polygon: August 23, 2021
  • Arbitrum: April 18, 2022
  • Optimism: May 4, 2022
• The trend of users on Sushiswap programs has been decreased over time since the start of 2022.

Part 2: Uniswap on L2s

Findings:

The activity of Uniswap on L2 chains investigated in this part:

• As expected, the Polygon network dominated the application and users of Uniswap on L2 chains.
• Optimism takes the second rank by little difference with Arbitrum.
• The trend of application of Uniswap on L2 chains has been increased over time specially after May, 2022.
• The add time of Uniswap on various L2 chains are as below:
  • Polygon: August 23, 2021
  • Optimism: November 11, 2021
  • Arbitrum: April 18, 2022

Part 3: Sushiswap and Uniswap on Polygon

Findings:

Now, its time to investigate Uniswap and Sushiswap on various L2 chains one by one.

The first chain is Polygon and the outcomes are as below:

• On Polygon, the Sushiswap has more application and users than Uniswap as can be seen.
• The Suhiswap application reduced on Polygon and the application of Uniswap increased well.
• In the first week of August 2022, the application Uniswap has been passed Sushiswap on Polygon.
• The 42% of users of Polygon on Uniswap has been used it just for 1 time.
• For Sushiswap users on Polygon, about 37% of them used it between 1-5 times.

Part 4: Sushiswap and Uniswap on Arbitrum

Findings:

The comparison of Sushiswap and Uniswap on Arbitrum chain take place in this part:

• The outcomes of application of both are very close together but Sushiswap has more usage than Uniswap on Arbitrum.
• The application of Sushiswap on Arbitrum has been spiked on some dates like August 31 and September 9, 2022. But Uniswap has consistent usage.
• The users interaction with Sushiswap and Uniswap shown that about 50% of Uniswap users on Arbitrum have been used this DEX 1-5 times.
• But Sushiswap has 42% of users with only 1 time use on Arbitrum and that’s the dominated bucket of usage.

Part 5: Sushiswap and Uniswap on Optimism

Findings:

The consequences related to the application of Suhiswap and Uniswap on Optimism network have been summarized as below:

• The Uniswap is the dominant DEX on Optimism with 96% of usage in comparison with Uniswap.
• On June 1st 2022, the application of Uniswap has been reached its highest count on Optimism as can be seen.
• From the users point of view, the Uniswap has far more users than Sushiswap on Optimism chain.
• The 60% of Sushiswap users have been interacted with this DEX for only 1 time but for Uniswap the dominant bucket belong to users with 1-5 time of usage with 47%.

Conclusion:

• Each DEX has demonization on various L2 chain like Sushiswap has highest application on Polygon in comparison with Uniswap.
• Also, Uniswap has been dominated the Optimism from all aspects.
• On Arbitrum both has approximately equal usage.
• Uniswap has growing application on Layer2 chains in comparison with Sushiswaps usage.

References and useful links:

• About Layer2 chains
• Sushiswap
• Uniswap
• Arbitrum
• Polygon
• Optimism

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani