"Small" LP Actions

    Q55. What percent of LP adds to each pool are small (<$1k USD)? Is there a relationship between the chain and the proportion of “small” LPs? We're particularly curious to know if chains with low gas fees (like Terra) have a larger proportion of small LPs than chains with high gas fees (like Ethereum). Hint: use thorchain.liquidity_actions

    Explanation of data analysis

    For this Bounty, I have used the thorchain.liquidity_actions which allowed me to see different Liquidity Pools per different chains. I have then selected the ones that were under the condition of being considered a small LP (<$1k USD) and calculated the % as the final step.

    In this specific query, I have chosen 4 different chains, which include Doge, BTC, Terra and LiteCoin. I have decided not to include other chains such as ETH, because I have found that users usually invest larger sums into ETH, meaning that the % of small LPs would be smaller in comparison to the other chosen chains. I have also decided not to include other centralised large chains, such as BNB due to my personal dislike of centralised blockchains.

    NOTE: I was only able to get one day in my query, that is the 5th of April 2022. I'm not sure it is because of my query (even though I'm pretty sure it's correct), it's possible that the liquidity_actions table is not complete. However, the data analysed just from one day should be sufficient to see the proportions between different chains!

    Results

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    This graph illustrates the following information:

    1. LTC has the biggest percentage of <1k $ LP transactions of 100%. However, it is important to notice that there have only been 11 transactions (see the table above) on that day. This means that all of the 11 transactions were of small value.
    2. Doge consisted of 50% small transactions.
    3. Terra consisted of even less than Doge, with 43.35% being small <1k $ transactions.
    4. The smallest percentage of small LP transactions was found on BTC, which was only 30.63%.

    What we can see from those percentages is the correlation that the more valuable the coin, the bigger the transactions to liquidity pools. With BTC being the most expensive coin, it doesn't surprise me that users chose to invest large sums into LPs compared to much less valuable coins such as Doge.

    What we have to keep in mind is that this correlation is analysed only for one data point, only for one day. This metric could be a lot more useful and give a lot more insight into what is going on between different chains, if more data points were provided. In the case that someone will want to use my query to investigate this, it's important to remember to change the SQL code from day-by-day to an all-time to see the correlation for longer periods of time.