Wallet Balances & Ecosystem Growth

    Introduction:

    Osmosis is Layer-1, Proof-of-Stake (PoS) blockchain built using the Cosmos SDK that has optimized its design to be a sandbox for automated market makers (AMMs). The chain enables developers to design and deploy customized AMMs by using its various modules and leveraging Osmosis' on-chain governance system, provide LP to existing pools to earn yield farming rewards, and ...

    OSMO is the native rewards and governance token for Osmosis.

    Methodology:

    What to understand here?

    • How has the ratio of liquid to staked OSMO changed overtime?
    • Are the top 100 OSMO holders the same now as they were at the start of the year?
    • What is the current average OSMO per wallet? How has that value changed over time? Plot average OSMO/wallet against user growth.
    • Do wallets normally hold a majority of OSMO, or another token? How has this changed over time?
    db_img

    OSMO holders analysis

    Loading...
    Loading...
    Loading...
    Loading...

    As you see above:

    1. Since ==2021 Dec 14==, OSMO liquidity has an upward trend and it has more than doubled (from ==160m== to ==384m== OSMO).
    2. In the same way, we’re seeing a doubling in staked OSMO too but its trend isn’t always upward in midterm (unlike OSMO liquidity).

    staked and liquid OSMO, we see several peak and ; totally we can divide this time period into ==4 sections==:

         2021 Dec 15 to 2022 Feb 26 downward trend Liquid OSMO grows faster
    
         Feb 27 to May 15 upward tend OSMO staking tendency increased
    
         May 16 to Oct 10 downward trend Liquid OSMO grows faster (especially during July)
    
         Oct 10 to current date upward trend severe decrease in staking tendency results in severe increasing of liquid to staked ratio.
    
    1. On February 9, we see the maximum OSMO percentage (compared to Liquid OSMO), which was 33.13%. On the other hand, the period from Section 4 (October 10 to the current date) saw the sharpest drop in the staking trend: the OSMO percentage dropped from 32.11 to 26.13%. (thus, many users un-staked their tokens).

    Note: Based on the OSMO procedure to un-delegation, the start of the un-delegation was initiated 14 days earlier (September 26).

    • At the beginning of 2022 year, only 3 whales have more than three quarters of all tokens; This situation still exists, with the difference that the share of the first three whales has dropped to about ==67%==, but on the other hand, all three have many more tokens than before (the largest whale has increased its token holdings so much that it alone currently holds about half of all tokens!).

      \

    • If we look at the holders of the sixth position and later, we see that they own a larger share compared to the beginning of the year, and here it becomes clear to whom the decrease of about 8% of the share of the top three whales can be attributed.

      \

    • The comparison of the list of the 100 largest holders at the beginning of the year and now shows that in addition to the old whales, who have actually stabilized their position by increasing their assets, many new holders have joined this list of 100. (So that 62% of the holders of this list are new)

      \

    In the table on the left you can distinguish these holders according to whether they are new or old.

    Loading...
    Loading...
    Loading...

    Just a little notice!

    what if I imagine holder as someone who has a token directly (and not delegate it to other addresses)?

    well not too hard… Just filter the results to ‘liquid‘ (and remove ‘staked’).

    Look at result:

    As you can see, the shape of this chart on the average accounts balance is not much different from the previous chart (see from the beginning of 2022), only the numbers are different.


    Some conclusions:

    1. the majority of tokens are liquid and not staked
    2. the previous conclusions regarding the impact of money inflows and outflows by large and small users are confirmed here as well.
    3. from the main reason for the change in the average balance of whales and taking into account that the shape of the current chart is not significantly different from the previous one, it can be concluded that most of the token assets of whales are liquid and not staked too.
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...
    Loading...

    Liquid, staked and liquid to staked OSMO analysis:

    Today osmosis analysis:

    Users wallets analysis

    db_img

    In this section, we analyze the number of users and their token balance:

    • Determining the average balance of each user is a simple task: just divide the total amount of tokens by the total number of users (for daily analysis, we perform these calculations separately for each day).

    • As you can see, the number of users is increasing (which is not surprising and completely predictable), and the average balance does not show a clear trend.

    • What is important and certainly interesting is the relationship between these two factors; To examine this relationship, I need to address three points:

      1. the balance of users is directly related to the average balance, while the number of users is inversely related.
      2. many users enter the Osmose blockchain every day, but do they all have a very high inventory? Definitely not.
      3. since the number of users (the denominator of the formula) is unlikely to decrease, only the entry of users with very high inventory (whales) can increase the average inventory and vice versa.

    So I conclude:

    Since beginning of 2022 to May 10, the average account balance has ==decreased== (and the number of users has increased, as usual). There may be several reasons for this problem:

    1. during this period, the increase in the number of normal users (with little liquidity) has exceeded the increase in the number of whales.

    2. whales have removed their holdings from this blockchain.

    3. both normal users and whales withdraw their holdings from this blockchain.

      \

    It doesn't matter if any of these three situations are true, because in my opinion, a decrease in the average balance for any reason is a sign of a decrease in confidence in the project or the cryptocurrency market as a whole, and vice versa.

    On the other hand, we see that between May 10 and July 26, there is an upward trend, which means that there is hope again.


    Currently, the average stock is in a downward trend that started on October 9; In this period, total balance has decreased 4.76% so I conclude users (normal users or whales or both) have withdrew! and this trend is keep going.

    • As expected, the number of users who have more OSMO tokens than the average per user, is much much lower than those who are above the average, again proving that whales play a very important role in determining the average balance of users (see the previous conclusion)

      \

    • OSMO is the most favorite token on Osmosis with about 345k holder; it’s followed by ATOM.

    > This analysis was created by MRFTI (Flipside, Twitter, mrfti#7948 on Discord) on 24 October 2022 for Flipside Crypto's Wallet Balances & Ecosystem Growth bounty. > > \

    Final conclusion:

    • The ratio of liquid tokens to backed tokens is a very important factor in analyzing the stability and growth of a POS blockchain. Since stacked tokens are not available for some time, the increase in stacked tokens can mean that the reliability of the blockchain increases and the possibility of drastic price changes and manipulation is reduced. By analyzing the ratio of liquid tokens to hedged tokens, we can use this information to make investments.

      \

    • Studying the behavior of whales is another important factor for the development of a blockchain. The increase in the number of whales and the increase in their wealth is a sign of their investment in the blockchain. Of course, we have to note if the tokens are divided among a larger number of whales (instead of a small number of whales owning a large portion of the tokens), this will help prevent price manipulation and ensure the stability of the network. So the existence of whales is good news for a blockchain, provided that the assets are divided among them too.

      \

    • The average liquidity factor is a suitable criterion to test the attractiveness of a blockchain. In my opinion, there are many factors that influence this factor, but the most important ones are "the speed of entry and exit of assets", "the speed of entry of new users" and "the ratio of entry of normal users to whales".

      \

    • When the average user account balance increases, it means an increase in investment and project growth.

      \