overview

What Is SushiSwap (SUSHI)?

SushiSwap is a decentralized exchange (DEX) equipped with its own custom automated market maker (AMM) smart contracts. Created by Chef Nomi, SushiSwap runs on the Ethereum blockchain.

Decentralized exchanges offer a space for peer-to-peer transactions of cryptocurrencies to take place securely without the need for an intermediary, and being equipped with its own AMM means that a pricing algorithm is used to price assets instead of using an order book like traditional exchanges.

SushiSwap is a community-run DeFi project that aims to better align incentives for network participants through revenue-sharing and community-driven network effects.

source:

What is Yield farming?

Yield farming is a means of earning interest on your cryptocurrency, similar to how you'd earn interest on any money in your savings account. And similarly to depositing money in a bank, yield farming involves locking up your cryptocurrency, called "staking," for a period of time in exchange for interest or other rewards, such as more cryptocurrency.

"When traditional loans are made through banks, the amount lent out is paid back with interest," explains Daniel R. Hill, CFP, AIF and president of Hill Wealth Strategies. "With yield farming, the concept is the same: cryptocurrency that would normally just be sitting in an account is instead lent out in order to generate returns."

source: https://www.maven11.com

What/Who is a Liquidity Provider?

A liquidity provider, also known as a market maker, is someone who provides their crypto assets to a platform to help with decentralization of trading. In return they are rewarded with fees generated by trades on that platform, which can be thought of as a form of passive income.

It is important to note that the assets provided are locked with the platform for the amount of time the user decides to provide liquidity.

Method: In this dashbord We will answer the questions in 2 parts:

Part-01:

Evaluate the distribution of various target segments who provide liquidity (LP):

• What’s the total no. of unique LP providers?
• What’s the ratio between Yield farmers vs. LP Providers?
• What’s the average no. of LP positions opened by each unique wallet address
• What’s the ratio of liquidity (Based on TVL) owned by the Protocol vs. Retail LP in both LP Pool and yield farms
• The percentage (%) increase/decrease of LP Providers in Sushi over the last 1 year
• Part-02:

Evaluate the profitability of an LP Provider & Yield Farmer

• Evaluate if there’s a correlation between profitability vs. length of time?
• Evaluate if there is a correlation between profit vs. time of withdrawal
• Correlation between profitability vs type of pool? EX: stable pool.

To answer our questions, we have used the following table:

ethereum.core.dim_dex_liquidity_pools

ethereum.core.ez_token_transfers

ethereum.events_emitted

We have used these addresses:

0xd9e1ce17f2641f24ae83637ab66a2cca9c378b9f for LP Provider

and 0xef0881ec094552b2e128cf945ef17a6752b4ec5d for Yield farming

As can be seen Retail LP and Retail Yield Farm is much more than Protocol LP and Yield Farm

The total number of LP providers is about 92K and the ratio of Yield Farmer to LP Provider

is about 0.17, which is relatively low.

As shown in the figure below, daily changes can be seen and it can be understood that

number of LP Providers and Yield Farmers decline since Jan 2022.

Part2: Evaluate the profitability of an LP Provider & Yield Farmer

        - Evaluate if there’s a correlation between profitability vs. length of time?

        - Evaluate if there is a correlation between profit vs. time of withdrawal

        - Correlation between profitability vs type of pool? EX: stable pool

It can be understood from the above charts that during the last one year, most of the months have been in a downward trend.

Except for a few months, there has been a decrease in the rest of the months.

The biggest decrease in LP Provider was in APR and the biggest decrease in Yield Farmers was in May

With regarding the charts,

there is no relation between profit and lenth of time and also there does not seem to be a strong relationship between the stable pool and profits.

Perp and Weth currency pairs have had the most profit, and X is one of the bases of the most profitable currency pairs.

Key Finding:

As shown in various graphs, from 2021 onwards, Sushiswap is not doing well and its trend is decreasing.

Several reasons may have caused this problem, some of which can be mentioned. One is related to the bear market and the price of Bitcoin. In a situation where almost the whole market is bearish and has few fluctuations, it is natural that UniSwap does not have high liquidity.

Another reason is related to the huge variety of projects, which has caused liquidity to be invested in different projects.