Try Quests to earn cryptoDEX Popularity: Tinyman, Algofi, Pact
In this analysis, the popularity and growth of Tinyman, Algofi, and Pact as the three major DEXs on the Algorand network have been evaluated.
Algorand, as a Layer-1 blockchain, consists of a dynamic ecosystem of dApps and DeFi protocols. For this ecosystem to thrive, a decentralized exchange (DEX) is a must to provide liquidity for layer-2 projects developed on the network. Among the multiple DEXs that exist in the Algorand blockchain, Tinyman, Algofi, and Pact stand out in terms of user adoption and the number of swaps.
In this analysis, the growth and popularity of these three DEXs will be investigated from April 2022.
The required data for this analysis were collected from swaps, prices_swap, and account tables of the algorand schema. April 2022 was considered as the beginning of the time frequency for this study. The wagmiswap DEX was excluded from the results due to insignificant values for the measured indices.
The number of unique wallets was measured using the address column, the number of swaps was measured using the tx_group_id column, and the volume of swaps was measured using the swap_amount (from/to) columns. In the course of this study, the cumulative values of the mentioned indices were also calculated. And, the net flow of these factors was also calculated as the difference between the value of swaps to and the value of swaps from for each factor.
To be able to analyze the behavior of ALGO whales, four ranges were defined based on the ALGO balance of each wallet's address. The definition of these ranges was inspired by the data for Bitcoin's whales, but it was corrected by considering the average price and the total supply of ALGO. It is worth noting that wallets with less than 100,000 tokens were omitted from being a whale. The mentioned ranges are as follows:
- Humpback: wallets with a balance of more than 100,000,000 ALGOs;
- Whale: wallets with a balance between 10,000,000 and 100,000,000 ALGOs;
- Shark: wallets with a balance between 1,000,000 and 10,000,000 ALGOs;
- Dolphin: wallets with a balance between 100,000 and 1,000,000 ALGOs.
>Note: The naming for whale ranges was inspired by an article published by Glassnode which you can read more about here.
Measuring the number of unique wallets swapping on the DEXs showed that Tinyman is by far the dominant DEX among the three. Although the activity on Algofi and Pact increased in early May, it decreased gain after its peak on May 12th. The interesting point that can be interpreted from the two charts below is the fact that Algofi and specially Pact have both closed the gap with Tinyman and now have a higher share of the market.
There is not a consensus on how to define a whale among the analysts. However, for the sake of this analysis, a definition was proposed based on different ranges of ALGO token holdings by each address. AS it has shown in the following charts, the majority of whales have been active on the Tinyman DEX except for the 11th and 12th of April when there was a huge number of swaps conducted by whales on the Pact platform.
In terms of categorization, it can be seen that from the four whale ranges that have been defined, only dolphins and sharks, the two smallest among the four, were active on the DEXs. There is a possibility that wallets with a whale or humpback label belong to a liquidity pool addresses of either the centralized exchanges or the decentralized exchanges, or even they belong to network administration addresses. In general, all of these addresses pose a massive amount of coins but, the coins are for the developments or the utilization of other users, not the holder of the coins itself.
To further compare the DEXs with each other, the daily and cumulative swaps volume of ALGOs have been analyzed. The overall swaps volume of ALGOs on all DEXs has had a steady trend in the measured period except during the second week of May when it massively increased and almost quadrupled. The other noteworthy take from this chart is that the cumulative volume of swaps from ALGOs is higher than swaps to ALGOs which is an indication of overall Algorand network growth. In other words, users are pouring their ALGO into these DEXs to be able to swap them for other tokens developed on the network.
The separate analysis of the daily volume of swaps from and to ALGOs has shown the same trend. It can be seen in the following two charts that although the volume of the swaps on Tinyman is more than the other two combined, Algofi and Pact have hugely closed the gap and are now accounted for the larger percentage of total ALGO swaps on the Algorand network.
To better analyze the swaps of ALGO on the DEXs, the net amount of its number of wallets, number of swaps, and volume of swaps have been measured and plotted in the charts below. It is worth mentioning that a net value of near zero indicates an almost equal balance between swaps to and swaps from ALGO tokens.
considering that, it can be seen that Tinyman has experienced a huge gap between the inflow and outflow of the ALGO tokens on its platform on most of the days during the measured period. Besides that, the next three graphs show that the behavior of users on these three platforms is not necessarily similar together. There are cases where when for example one of them experienced a huge outflow, another experience a higher inflow compared to that.
The previous analyses were carried out again considering only the swaps from ALGO to also include the price of ALGO. As it has been shown in the following graphs, the decrease in price in the current downtrend of the crypto market has had contradictory effects on the swaps of ALGO tokens.
As the price saw a decrease over time, the number of Tinyman's wallets also saw a decrease, yet at the same time, the number of wallets on Algofi and Pact either increased or remained the same. The number of swaps had not affected by the price until the second week of May, which dropped immensely in coincidence with the huge crypto market downtrend. On the other hand, the volume of swaps has continued to rise in the measured period and while it has also been affected by the drop in the price of ALGO, it has been higher in May compared to April.
>Note: There are three unlabeled rows of values visible on the charts which from top to bottom are the values for Tinyman, Algofi, and Pact, respectively.
In conclusion, the Algorand DEX ecosystem has been investigated in this analysis. Overall, the data showed that although the Algorand network and its DEXs suffered from the crypto market downtrend in terms of reduced number and volume of swaps, it has been improving over the past few weeks. Among the three major DEXs of the network, Tinyman is by far the dominant Algorand DEX, but Algofi and Pact as its rivals are growing at a fast pace. It can be expected the gap between them decreases over time and they become much closer in terms of user engagements and usage in the near future.