Burn the House Down
Introduction
Osmosis is a decentralized peer-to-peer blockchain using the Cosmos SDK. IT is an advanced AMM protocol that will allow developers to design, build, and deploy their own customized AMMs.
Osmosis enables everyone to contribute to the network by running a node, also as the Osmosis blockchain is a proof of stake, users can delegate validators by adding liquidity to pools.
When a liquidity provider pulls their liquidity out of a pool their LP shares are burned.
This dashboard investigates LP burning on Osmosis.
Method
To to find burn transaction osmosis.core.fact_msg_attributes has been used.
Through transactions and using osmosis.core.fact_transfers tokens and amounts burnt have been found.
Finally, to calculate the OSMO value of tokens burned, the average daily price of tokens (in OSMO) has been calculated using osmosis.core.swaps.
Looking into the week of burning spike, we can see that the peak is on May 11th. May 11th marked as the collapse of Terra chain and UST depeg.
In terms of the effect of the incident on the Osmosis ecosystem, we can see that in addition to UST (newly know as TerraClassicUSD ) annd LUNA (LUNA Classic), Cosmos and Juno had the highest burning.
The graph below the top 10 tokens in terms of burnt amount and the graph afterwards shows all tokens burnt during that week.
Conclusion
On May 11th UST, Terra algorithmic stablecoin, depegged. This incident resulted from the sharp fall of LUNA price and resulted in the full collapse of Terra ecosystem.
The impact of incident was beyond Terra chain. More or less all blockchain world was influenced directly and indirectly by this event.
The analysis above shows that the event had a major impact on Osmosis led to a surge in exit from pools or burning tokens.
We can see that in addition to LUNA and UST other tokens (pools) such as Juno, and Cosmos has also burnt.