Introduction and methods

Node operators are those people who essentially run the chain's software by validating new blocks written to the chain and broadcasting them to the network. On the other hand, a liquidity provider, is someone who provides their crypto assets to a platform to help with decentralization of trading, providing or validating some nodes/validators, which in return they are rewarded with fees generated by trades on that platform, which can be thought of as a form of passive income.

For this reason, it is a good point to analyze the aggregate weekly APY of active node operators against the liquidity providers. In this dashboard, we will try to do so by analyzing the metrics over time and comparing it in a scatter plot chart to see any relationship between the,.

Results

This first chart shows the weekly APY generated by both sides, Node operators and liquidity providers. As it can be seen, there is a similar trend on the same direction for both parties. During May and July 2021, the APY for Liquidity providers increased a lot and the same occurred for APY nodes. After the restart of the network no November 2021, it seems like the APYs entered in standby, fluctuating in similar values over time.

Taking a look at the scatter plot, we can see the string positive relationship previously suspected. In this case, it can be seen clearly how the APY nodes is higher when teh APY for liquidity providers is higher and viceversa.

Conclusion

In this dashboard, we have compared the APY node operators with the APY for liquidity providers on Thorchain. For the analysis, we have considered the weekly APYs for both sides and calculated the trajectory of both. Finally, we have compared both metrics to see some relationship.

The most important insights extracted from the results are :

• There is a strong positive correlation between APY nodes and APY for liquidity providers
• The APYs increased during the first month and remained constant since November 2021.

Source:

• Node Operator
• Liquidity provider