📜 Introduction

Velodrome Finance, at its core, is a solution for protocols on Optimism to properly incentivize liquidity for their own use cases. They have their own token called $VELO, which users can lock for some time and gain voting power.

There are two type of liquidity pools in Velodrome Finance: Stable Pools and Variable Pools.

In this dashboard we are going to take a look at the some of the metrics that show overall health of the Velodrome platform over time.

we are going to look at the metrics extracted from Swap, LP and Lock data.

Swaps

Locks

Liquidity Pools

🤔 Approach

Data Source & Tables

To conduct our study, we are using Flipside Crypto data warehouse, following tables are used to access swap, LP and lock data.

• optimism.velodrome.ez_swaps
• optimism.velodrome.ez_lp_actions
• optimism.velodrome.ez_velo_locks

Method

An extensive range of data-driven metrics are used in this study, In each section we dive a little deeper and explain some of them if required. The exploit is also mentioned and investigated in each section.

Study Period

This study is conducted since Jun 15.

Top Tokens Swapped From

• USDC, with more than $1.15B volume, accounts for 43% of swapped from tokens. Followed by OP with 26.7% of swap share.

Daily Activity

The next charts show the number of liquidity providing actions and liquidity provider per day.

It can be seen that:

• The number of LPs have increased exponentially until the exploit on August 4th.
• Although the number of daily users and LP increased after the exploit it doesn’t necessarily mean it’s a good news. user might have returned to withdraw their assets. we will explore this later on this section.
• There was a dip in daily LP count in Sptember.

The overall average number of daily LP has been increasing over time.

Daily Activity

In this section we look at the swapping data on Velodrome.

The following charts show

• The number of daily swaps
• The number of daily swapper (user)
• The number of pools utilized each day

These metrics capture daily user interaction with the platform's swap functionality, often times a growing or at least stable user base indicates a healthy platform.

Deposit to Withdraw ratio

The next chart show the ratio of deposit and withdraws volume in USD. the amount of deposits are a bit more, but withdraw amount is already high!

From almost $420M deposited almost $380M is withdrawn, only about $40M is kept in the platform. This is not necessarily a bad omen,

Daily LP Volume

The following chart shows the daily amount of volume transferred to and from liquidity pools. On august 5th, the deposit amount is almost zero, probably due to the exploit.

Since Aug 20 until now, the average amount of LP volume has been relatively low (compared to August).

Top Pools by Deposit Amount

Top Pools by Withdraw Amount

Daily Activity

Locks can also be used to determine the health of the velodrome platform, they are used both to gain profit from locking VELO tokens and also earn voting rights.

It can be seen that:

• similar to other metrics that we studied, daily lock count and daily locker user count, also show growth right before the exploit.
• After the exploit, also users returned.
• After the exploit, there was a massive increase in deposit count on Aug 11.
• In locks section, users have to wait for their funds to unlock before withdrawing.

Since August, there has been few days on each week that number of locks are very high, but at the same time, It seems locking on other days has been declining, Therefore keeping average number of locks around the same number.

Deposit Withdraw Ratio

As already mentioned in the previous part, users cant simply withdraw their VELO tokens that are locked for a specific period.

It is also clear from the graphs below that the largest volume is related to deposits.

Daily Volume

The following chart show the daily deposit and withdraw volume in USD. The next chart depicts the net volume.

It can be seen that:

• On June 15, the first day that platform started working, mostly deposits are done.
• Over time the volume of locks have increased. On Jun 27, more than $1M is locked!
• After the exploit, the volume didn’t change significantly.
• There are two days with negative volume, these days cannot be related to the exploit, as one of them is before the exploit, and the next day could simply be the end of some lockout period.

Unlock Periods

In Velodrome, unlocking courses can also mean trusting the platform, which in turn can mean being hopeful in its health.

By looking at the following charts it can be seen that:

• There is a massive fund locked for more than 4 year.

• There is considerable amount of funds locked, that will be unlocked in mid 2023.

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By looking at the following charts, it can be seen that:

• Right before August 4th, before the exploit, the platform was growing in a rapid manner. before August 4th:
  • The platform had seen a significant increase in daily swap count, from an average of 6K to an average of 45k each day, an increase of 7.5 times.
  • User count had a noticeable increase as well, from 300 to 1300 daily unique user.
  • The number of daily pools also had increased from 30 to more than 75.
• After the incident, most users returned.
• Although most users returned, the swap count didn’t reach its peak numbers.
• The number of pools utilized returned to its peak amount.
• Over time, the impact of the exploit was negated and the number of utilized pools increased as time passed.
• During first week of November, the number of daily swap experienced a massive spike.

Top Tokens Swapped To

Daily Net LP Volume

The following chart shows the net amount of liquidity deposited into the pools, it is of the utmost importance, before the exploit the net deposited volume is always positive (with exception of Jul 2), after the attack its negative everyday.

This mean that although many users were active after the attack, they were actually removing their liquidity from pools.