Introduction

Optimism is a layer 2 scaling solution chain for Ethereum. It increases the speed of transactions and decreases the fees of transactions functioning on top of the Ethereum mainnet (layer 1).

The so-called ‘Ethereum merge’, by switching the validation system from PoW to PoS, reduces transaction fees on Ethereum. This questioned the relevance of Layer 2 blockchains such as Arbitrum, and Optimism after the merge.

This dashboard focuses on Optimism and attempts to shed some lights on factors that may increase the user activities on Optimism.

Method, Data and Definitions

In this dashboard, the focus is on token transfers (including ETH). The degree embeddedness of each address is defined as the number of wallet addresses that the wallet transferred to and from. We also distinguish between indegree (address_from) and outdegree (address_to).

User is defined any address which send or receive a token transfer on Optimism. Users indegree is defined as the number of addresses which connected to through receiving transfers and outdegree is the number of addresses which connected to through sending transfers.

From Optimism.core schema two tables have beem used: optimism.core.fact_token_transfers and optimism.core.ez_eth_transfers .

For any wallet address the number of addresses that send or received an ETH or any other token has been calculated.

Descriptive Analysis

The graph below shows the daily number of users and transfers over time. We can see that both the number of users and the number of transfer per day is growing.

Research Question

Networks consists of nodes (actors) and edges (relationships ). The token transfers among users on Optimism can be considered as a network where nodes are ‘wallet addresses’ and edges ‘token transfers’. In networks, the degree of embeddedness has relationship with the sustained activity of actors. The more a node is embedded in a network , the more likely it is it contributes to that network for a longer time.

We can expect that Optimism users with the higher embeddedness degree, be more active in the network and for longer time.

In this dashboard, we specifically, examine how the degree of embeddedness of Optimism users change over time.

In the below graph senders and receivers has been distinguished. We can see the daily number of senders is higher than the number of receivers. This is caused by the fact that the institutional addresses receive more than send.

The other graph also shows the daily average number of transfers per user over time. We can see that since July the daily average number of transfers has been fluctuating between 5 and 6.

Analytical Explanations

The main argument of this dashboard is that the degree of embeddedness increases the activeness of users.

Let’s test this hypothesis: The more a user is connected through sending and receiving transfers, the more likely it is to engage in the Optimism through transactions.

Here, I only focuses on the top 100 addresses in terms of the indegree and outdegree. The correlation between the degree of embeddedness and the number of transactions (activeness) of a user is obvious.

Therefore, we can conclude that, the degree of embeddedness can predict the activeness of users on Optimism

Now, we explore how the average degree of embeddedness of users is changing on Optimism.

Graphs below show how the average degree of indegree and outdegree of Optimism users has changed over time.

We can see that the average outdegree of users is growing. Meaning that, the number of users that on average users are connected to through sending tokens is growing. It implies that the Optimism network is turning to a more cohesive network.

However, the indegree cannot show a clear trend. The average indegree in Q1 is higher than in Q2 and Q3. This may resulted from the fact that in Q1 the proportion of institutional addresses to the ordinary users were much higher than the other periods.

Graphs and tables below show the top 50 address with the highest indegree and outdegree.

The focus in this section is on October 2022.

Uniswap has the highest indegree (received tokens from many addresses) and Binance hot wallet has the highest outdegree (send token to many addresses).

Conclusion

In this dashboard we argued the higher degree of embeddedness leads to the more active and committed user. Then we explored how the average degree of embeddedness of users on Optimism changed over time.

We focus on the three quarters in 2022. We saw that the average outdegree embeddedness is growing sharply. This can support the healthiness of Optimism network and predict the more active and committed users in future.

When a user is embedded in a network means that engages more with the very network which makes dropping out unlikely.