Optimistic Bears (Redux)

    Description of work

    In this dashboard, we want to analyze the Optimism network in July 2022.

    This dashboard includes the following parts:

    a- Definitions

    1. Market performance

      • 1 - 1 Analyzing daily users and new users.

      • 2 - 1 Analyzing Optimism native token(OP) price.

      • 3 - 1 Analyzing OP inflow and outflows in centralized exchanges.

      • 4 - 1 Analyzing NFT sales.

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    2. Network performance

      • 1 - 2 Analyzing the number of transactions
      • 2 - 2 Analyzing the success rate and failure rate of transactions
      • 3 - 2 Analyzing the network’s TPM(Transactions Per Minute).
      • 4 - 2 Analyzing the network’s average block time.
    3. Inflow and outflow on bridges

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    4. Conclusion

    Definitions


    What is Optimism?

    Optimism is a Layer 2 solution for Ethereum, the most popular Layer 1 blockchain for building dApps. Ethereum is the first blockchain to launch with smart contracts.

    Optimism is a scaling solution for Ethereum and is a separate blockchain running on top of it. Optimism's mission? To help end-users like ourselves access Ethereum's dApps with cheaper transactions and a smoother user experience.

    According to DefiLlama, Optimism currently ranks #7 for the most popular chains by TVL, with roughly $800.15 milion locked in. (Aave dominates nearly 26.56% of this figure.)

    Source: coingecko.com

    Optimism Blockchain Explorer

    You can read more about layer-1 and layer-2 blockchain scaling solutions at: gemini.com/cryptopedia


    What is OP?

    OP is the Optimism network's native token. According to coinmarketcap, OP's Total supply is 4,294,967,296 OP tokens, and the current circulating supply of OP equals 234,748,364.00 tokens.

    Optimism launched its OP token on May 31, 2021. A total of 231,000 addresses were eligible to claim 214 million OP tokens for free (known as an “airdrop”).

    The OP token gives holders participation rights in The Optimism Collective, a two-tier governance system composed of Token House and Citizens’ House. Token House governs technical decisions related to Optimism, such as software upgrades. The Citizens’ House governs public-goods funding decisions.

    Source: coindesk.com

    1 - Market performance


    Methodology

    • To calculate the number of users and the number of new users, we use FROM_ADDRESS field from [optimism.core.fact_transactions]

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    • We use data from[optimism.core.fact_hourly_token_prices]table to calculate OP token price.

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    • To calculate OP inflow and outflows in centralized exchanges:

      • First, we use data from [optimism.core.dim_labels]to find centralized exchanges wallet addresses

      • Then, we use data from [optimism.core.fact_token_transfers] to find transactions that send OP to centralized exchanges.

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    • To calculate NFT sales, we use data from [optimism.core.ez_nft_sales]

    2 - 1 Analyzing Optimism native token(OP) price.

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    ✔️Observations

    • OP’s highest and lowest daily prices were recorded on July 13($0.45) and 30($1.75), respectively.

    • From the beginning of July to the middle of July, the price of OP wasn't changed much. Since July 15, the upward trend of its price has started.

    • The OP price chart until July 10 has no significant correlation with the price of Bitcoin. But from July 10 onwards, there is a correlation between OP price and BTC price.

    4 - 1 Analyzing NFT sales

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    ✔️Observations

    • The highest number of NFT sales was recorded on 2022-07-27(2098 sales), 2022-07-30(2045 sales), and 2022-07-31(1681 sales).

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    • The increase in the OP price has increased the number of NFT sales.

    • The highest average sale price was recorded on 2022-07-06 (35.99$ - 244 sale), 2022-07-07 (34.47$ - 201 sale), and 2022-07-01(29.5$ - 15 sale).

    • The OP price chart until July 10 has no significant correlation with the NFT sales volume. But from July 10 onwards, there is a correlation between OP price and NFT sales volume.

    • There is no significant correlation between NFT sale volume and average sale price.

    • On July 2, 2022, no NFT sales have been recorded.

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    1 - 1 Analyzing daily users and new users.

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    ✔️Observations

    • The total number of new users who joined Optimism in July 2022 equals 96.3K.

      • The highest number of new users who joined Optimism in July 2022 was recorded on 2022-07-27(28.78K users), 2022-07-28(10.78K users), and 2022-07-30 (9.98 K users).

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    • The total number of Optimism users in July 2022 equals 395K.

      • The highest number of user activity on Optimism was recorded on 2022-07-27(63.28K users), 2022-07-28(32.33K users), and 2022-07-29(27.62K users).
    • The increase in the price of OP has increased the number of users and new users who joined Optimism.

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    3 - 1 Analyzing OP inflow and outflows in centralized exchanges.

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    ✔️Observations

    • The number of OPs outflowed from centralized exchanges(68.3M OPs) is 6.22% more than the number of OPs inflowed to centralized exchanges (64.3M OPs) in July 2022.

    • The number of OP outflow transactions from centralized exchanges (9.15K transactions) is about 0.65% less than the number of OP inflow transactions to centralized exchanges (9.21K transactions) in July 2022.

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    • On the days when the OP had a sharp price increase, the number of OPs inflowed to centralized exchanges increased.

    • If we consider transactions that have moved more than 200,000 OP as whale transactions:

      • The number of transactions that transferred more than 200,000 OP to exchanges is equal to 38 transactions and the number of transactions that moved more than 200,000 OP from exchanges to wallets is equal to 14 transactions. It can be concluded that in July 2022, most OP whales started selling their OPs.
      • Binance is the most popular exchange among OP whales.

    2 - Network performance


    • To calculate the number of transactions, successful and unsuccessful transactions, and TPM, we use data from [optimism.core.fact_transactions]table.

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    • To calculate the network’s average block time, we use data from [optimism.core.fact_blocks]table.

      • The details of how to calculate the network’s average block time are explained in my previous work, Polygon Block Performance

    1 - 2 Analyzing the number of transactions

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    ✔️Observations

    • The total number of transactions in July 2022 was 3.27M.

    • The highest number of transactions was recorded on July 29(233.31K), 28(209.55K), and 27(197.66K), respectively.

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    • The sharp increase in the OP price on July 18 and July 27has increased the number of transactions.

    2 - 2 Analyzing the success rate and failure rate of transactions

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    ✔️Observations

    • The transaction success rate was 90.5% in July 2022.

    • The highest number of unsuccessfultransactions was recorded on July 29(30.406K), 28(30.42K), and 30(21.962K), respectively.

    • Failed transactions increase as the number of transactions increases.

    • The highest failure rate of transactions was recorded on July 29 which equals 14.13%.

    3 - 2 Analyzing the network’s TPM

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    ✔️Observations

    • Optimism’s average TPM was 77 in July 2022.

    • The highest network TPM was recorded on July 29(189), 28(167), and 27(150), respectively.

    • As OP price increased, the network’s TPM increased.

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    ✔️Observations

    • Optimism’s average block time in July 2022 was 0.952 seconds.

    • By comparing the daily block time chart with the daily TPM chart and the number of daily transactions, we find that the average block time has an almost inverse relationship with the number of transactions and TPM.

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    • An increase in the number of transactions and TPM causes more blocks to be generated and the average block time to decrease, and vice versa.

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    4 - 2 Analyzing the network’s average block time.

    3 - Inflow and outflow on bridges


    Methodology

    Inflows

    • To find assets that have bridged from the the Ethereum networkto the Optimism network, we use transactions in L1→L2 Transactions section in Optimism Blockchain Explorer.

      When a user moves an asset from the Ethereum network to the Optimism network, a transaction with the origin = 0x000000000000000000000000000000000000000 (This address is commonly used by projects to burn tokens (reducing total supply) or mint tokens (increasing total supply))

      and destination = 0x420000000000000000000000000000000007 (L2CrossDomainMessenger) Is done. By tracking these transactions in [optimism.core.fact_event_logs] table, we can find the transferred assets from Ethereum to Optimism.

    Outflows

    • To find assets that have moved from the Optimism network to the Ethereum network, we use transactions in L2→L1 Transactions section in Optimism Blockchain Explorer.

      When a user moves an asset from the Optimism network to the Ethereum network, the asset is sent to 0x000000000000000000000000000000000000000 (This address is commonly used by projects to burn tokens (reducing total supply) or mint tokens (increasing total supply))

      By tracking these transactions in [optimism.core.fact_event_logs] table, we can find the transferred assets from Optimism to Ethereum.

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    ✔️Observations

    • The total inflow volume($) on bridges in July 2022 was $214M which is 25.6% more than the Total outflow volume($) on bridges ($170M) in July 2022.

    • The sharp increase in the OP price on July 18 and July 27has increased the inflow volume on bridges.

    • There is no correlation between the OP price and the outflow volume on bridges.

    • The highest inflow on bridges was recorded on 2022-07-29($29.42M), 2022-07-28($23.36M), and 2022-07-27($16.18M).

    • The highest outflow on bridges was recorded on 2022-07-22($31.46M), 2022-07-26($11.88M), and 2022-07-10($11.37M).

    • Inflow volumes on bridges are dominated by USDC (51.9%), WETH(18.2% ), and SNX(14%).

    • Outflow volumes on bridges are dominated by sUSD (51.9%), USDC(18.2% ), and sETH(14%).

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    4 - Conclusion

    In this dashboard, we analyzed the Optimism network in July 2022 from different perspectives, and the following results were obtained:

    • The increase in the price of OP has increased the number of users and new users who joined Optimism.

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    • OP’s highest and lowest daily prices were recorded on July 13($0.45) and 30($1.75), respectively.

      • From the beginning of July to the middle of July, the price of OP wasn't changed much. Since July 15, the upward trend of its price has started.

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    • The number of OPs outflowed from centralized exchanges(68.3M OPs) is 6.22% more than the number of OPs inflowed to centralized exchanges (64.3M OPs) in July 2022.

      • In July 2022, most OP whales started selling their OPs.

      • Binance is the most popular exchange among OP whales.

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    • The OP price chart until July 10 has no significant correlation with the NFT sales volume. But from July 10 onwards, there is a correlation between OP price and NFT sales volume.

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    • The total number of transactions in July 2022 was 3.27M.

      • The sharp increase in the OP price on July 18 and July 27has increased the number of transactions.

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    • The highest failure rate of transactions was recorded on July 29 which equals 14.13%.

      • Failed transactions increase as the number of transactions increases.

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    • Optimism’s average TPM was 77 in July 2022.

      • As OP price increased, the network’s TPM increased.

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    • Optimism’s average block time in July 2022 was 0.952 seconds.

      • By comparing the daily block time chart with the daily TPM chart and the number of daily transactions, we find that the average block time has an almost inverse relationship with the number of transactions and TPM.

      • An increase in the number of transactions and TPM causes more blocks to be generated and the average block time to decrease, and vice versa.

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    • The total inflow volume($) on bridges in July 2022 was $214M which is 25.6% more than the Total outflow volume($) on bridges ($170M) in July 2022.

      • The sharp increase in the OP price on July 18 and July 27has increased the inflow volume on bridges.

      • There is no correlation between the OP price and the outflow volume on bridges.

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    • Inflow volumes on bridges are dominated by USDC (51.9%), WETH(18.2% ), and SNX(14%).

    • Outflow volumes on bridges are dominated by sUSD (51.9%), USDC(18.2% ), and sETH(14%).