Try Quests to earn SOLVelodrome Health
Overview 👀 ~ 6 min read
In this dashboard, I will answer this question from Flipside Crypto:
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Create at least 5 metrics on Velodrome with a description for each that showcase traction and success in a data-driven manner.
Most importantly, your insights should help our readers answer the question "How healthy is this project?"
Introduction 💭
What is Optimism Ethereum?
Like other L2 solutions, the Optimism team saw an opportunity to be a new scaling solution for Ethereum without compromising security and decentralization as shown in the trilemma. Optimistic Ethereum is an EVM compatible rollup chain designed to be fast, simple, and secure, and allows users to interact with any Ethereum application at a fraction of the cost by using optimistic rollups.
You can think of optimistic rollups as a smart contract that bundles (or “rolls up”) transaction data and moves it off chain for faster processing. Optimistic rollups are distinct from zero knowledge (ZK) rollups, because they use a different method of verification: while ZK rollups rely on each batch of transactions to have their own ‘validity proof,’ optimistic rollups assume all transactions are valid. .[1]
What is Velodrome?
Velodrome Finance is the liquidity base layer for the entire Optimism ecosystem. Launched in June 2022, it focuses on properly incentivizing liquidity for DeFi protocols.
On a typical DEX, Liquidity Providers reap the lion’s share of rewards. However, that drives mercenary behavior as Liquidity Providers are not invested in the long-term growth of the protocol. They withdraw their funds and migrate as soon as another DEX proposes better rewards.
Curve Finance’s solution is to reward 50% of the total protocol fees to $CRV Lockers. Velodrome takes this a step further.
Velodrome Finance aligns protocol and user interests, by strongly encouraging users to lock their $VELO tokens. Users who lock their tokens claim 100% of the fees of the Liquidity Pool they vote for. This pushes users to vote for the most traded pool and increases liquidity mining in this pool. The TVL of the protocol increases, slippageSlippage is the difference between where the price the user ... decreases, and swap rates improve. FLYWHEEL effect engaged!
- Liquidity Providers: By depositing liquidity into the sAMM or the vAMM pools, liquidity providers earn $VELO tokens in proportion to their deposit share in the LP and the number of gauge votes the LP received.
- Lockers: The $VELO token can be locked for up to 4 years and provides voting power in the gauge votes that allocate the weekly emissions of $VELO to the Liquidity Pools. Lockers are entitled to 100% of the trading fees and 100% of the bribes for the voted pool. In addition, Velodrome Finance received 3,000,000 $OP tokens as a grant from the Optimism Foundation. These tokens will be distributed alongside other rewards to incentivize liquidity on the protocol. While $OP emissions are running, additional bribes/vote power will also be distributed.
Methodology 🧠
To solve this question
The first light that turned on in my mind was how this platform performed when it was exploited compared to other platforms that were exploited? For this reason, I compared the Velodrome platform when it was exploited with the platforms that came to my mind and were exploited, such as Mango and Tinyman. Then I went to the number of swaps per second/minute and hour on this platform and compared it with other swap platforms like UniSwapV3. Trade Activity I got the native token VELO and compared it with another platform like Sushi Swap I got the number of votes and voters in Velodrome I obtained and analyzed transactions related to Velodrome Lock I got and analyzed the Stake And Unstake in the top Velodrome pools And finally, where do users who come from Ethereum to Optimism make transactions first of all? I added the transfer transactions in Gateway, Hob protocol and Across bridges to this analysis
> > # How did this platform perform when it was exploited compared to other platforms that were exploited?
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> > # That's why I compared the Velodrome platform when exploited with platforms like Mango and Tinyman
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🕵️♀️ observations
- At the time of exploitation, a lot of excitement and vibrancy happens on the platform, moments that no one wants to experience. But in my opinion, the first thing that every platform should try after being exploited is not to lose the trust of users. The Velodrome platform has done a great job in this case, even though nearly 350,000 dollars were lost, but users still trust this platform, perhaps more users have been added. But Tinyman, maybe the number of transactions has increased, but the number of users has decreased and we cannot see any special trends in this platform. Mango also lost the trust of users with the exploit that was done, and from the volume of sometimes up to 2 million transactions per day, it reached 2-digit numbers below 100 transactions per day.
- The score I give to the health of the Velodrome in this section is 100 out of 100 💪😍
> > # Trade Activity Velodrome's native token i.e. velo in the optimism chain compared to Sushi Swap with the sushi token in the ethereum chain, how did it perform? > > > > > # It's a bit unfair to compare, but don't underestimate the velodrome! 💪 > >
🕵️♀️ observations
- Always choose your opponent from among the best! Let's see how the performance of Trade Activity for the velo token compares to one of the big ones in the Ethereum chain, namely Sushi Swap with the sushi token?!
- Observations fully show the power of sushi, which has completely maintained the balance in supply and demand, but it has so much experience! If I'm not mistaken, this platform has been around since 2018! But Velodrome's total days may not even reach 1 year, however, it makes an admirable effort to maintain its token satisfaction and demand ratio, and this is admirable in my opinion.👏
- The score I give to the health of the Velodrome in this section is 95 out of 100 💪😍
> > # The number of swaps per second / minute and hour on this platform and comparison with other swap platforms such as UniSwapV3 (Ethereum) > >
🕵️♀️ observations
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The number of swaps per second was also compared with one of the toughest competitors, namely UniSwapV3 in the Ethereum chain! The figures are unique in the same time frame Let's not forget that we are comparing a layer 1 platform with a layer 2 platform, but in these difficult conditions for Velodrome, it has shown excellent performance, even on some days it can be seen that the number of swaps per second of UniSwapV3 It has become more and more that is great
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The score I give to the health of the Velodrome in this section is 100 out of 100 💪😍
> > # How are the locks in the Velodrome? Do they increase day by day? > >
🕵️♀️ observations
- The locks in the Velodrome were few at the beginning, which is normal. After a while, we see that in addition to the number of locks, users have also increased the duration of their locks and the amount of their locks, which is great.
- Claims have also been paid in stages and this shows that the platform has paid rewards continuously.
- But the number of locks has decreased over time, which can be attributed to the bad market conditions, but despite this, the overall performance seems healthy.
- The score I give to the health of the Velodrome in this section is 92 out of 100 💪
🕵️♀️ observations
- How about the duration of the locks? It should be said that the locks that are more than 4 years old have increased over time and this shows that users are becoming more and more confident that they have left their assets in a safe place.
- Definitely, if a user has this opinion, he should recommend this platform to his friends. It introduces itself which is great
- The score I give to the health of the Velodrome in this section is 100 out of 100 💪😍
> > # Stake And Unstake in the top Velodrome pools > >
🕵️♀️ observations
- The conditions for Stake and Unstake are also excellent on the Velodrome platform. Since September 21, the conditions have become even better!
- The number of Unstake transactions is almost a quarter of Stake, and more than 50% of users are interested in staking their assets.
- Another point is that most users choose pools that have the native token of this platform (Velo) in their pools, which in turn increases the price of the token and increases the credibility of this platform.
- The score I give to the health of the Velodrome in this section is 98 out of 100 💪😍
> > # number of votes and voters in Velodrome > >
> > # Where do people go when they bridge to Optimism from Ethereum? > >
🕵️♀️ observations
- People who transfer their non-Eth tokens from this bridge, more than half of their destinations are doing swaps in Velodrome, which is great,
- in addition, these users have also chosen to create liquidity in Velodrome.
- Swaps are more common in the vAMM-WETH/USDC pool
- 66.69% of people's destination is Velodrome
🕵️♀️ observations
- People who transfer their Eth tokens from this bridge, almost half of their destinations are doing swaps in Velodrome, which is great.
- In addition, this group of users have also chosen to create liquidity in Velodrome,
- and a small group also directly go to Stake on the Velodrome platform.
- 49.75% of people's destination is Velodrome
🕵️♀️ observations
- People transferring their Eth tokens from this bridge more than half of their destinations are doing swaps at the Velodrome, which is great
- and a small group also directly go to Stake and creating liquidity on the Velodrome platform.
- Swaps are more common in the vAMM-WETH/USDC pool
🕵️♀️ observations
- People who transfer their non-Eth tokens from this bridge, more than half of their destinations are doing swaps in Velodrome
- In addition, this group of users have also chosen to create liquidity in Velodrome,
- and a small group also directly go to Stake on the Velodrome platform.
- 57.94% of people's destination is Velodrome
- The score I give to the health of the Velodrome in this section is 90 out of 100 💪
- If people did more activities on the Velodrome platform, the score would be complete
Conclusion 🎉
- Velodrome showed excellent performance during exploitation and we saw progress. 100 points
- Velodrome has shown a good performance in maintaining the supply and demand of its velo token and is only 5% away from the 50% balance. 95 points
- TPS it has shown excellent performance, even on some days it can be seen that the number of swaps per second of UniSwapV3 It has become more and more that is great . 100 points
- the number of locks has decreased over time, which can be attributed to the bad market conditions, but despite this, the overall performance seems healthy. 92 points
- It should be said that the locks that are more than 4 years old have increased over time and this shows that users are becoming more and more confident that they have left their assets in a safe place. 100 points
- The number of Unstake transactions is almost a quarter of Stake, and more than 50% of users are interested in staking their assets. 98 points
- it is important that the number of votes and voters who vote are more than those who do not vote, which shows that the society is interested in improvements. 99 points
- People who transfer their tokens to Optimism, more than half of them choose the swap in vAMM-WETH/USDC pool as the first destination, and a small percentage do other activities. If the variety of activities was more, it would be great. 90 points
Now the health score of the platform is given out of 100: 96.75 || A+
100 + 95 + 100 + 92 + 100 + 98 + 99 + 90 = 774 / 8 = 96.75 🥇🎊
Appendix 🤝
The solution of this question and the queries are completely used from the filipside database
The construction of the dashboard was also used from the site
app.flipsidecrypto.com/velocity, which belongs to flipside
In this dashboard you will read ✍
- How did this platform perform when it was exploited compared to other platforms that were exploited?
- Trade Activity Velodrome's native token i.e. velo in the optimism chain compared to Sushi Swap with the sushi token in the ethereum chain, how did it perform?
- The number of swaps per second / minute and hour on this platform and comparison with other swap platforms such as UniSwapV3 (Ethereum)
- How are the locks in the Velodrome? Do they increase day by day?
- Stake And Unstake in the top Velodrome pools
- number of votes and voters in Velodrome
- Where do people go when they bridge to Optimism from Ethereum?
