Assignment Dashboard

    MetricsDAO Web3 Analytics 201 Feb 2023 Cohort 1

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    Intro

    In this analysis, we will explore the Uniswap v3 pools with high annual percentage rate (APR) at the aggregate level. Uniswap v3's concentrated liquidity feature provides users with the ability to earn a higher share of the total fees collected in ranges closer to the actual price. However, for this analysis, we will not consider the fee dispersion amongst concentrated liquidity positions. Instead, we will focus on the total APR as a function of TVL and Volume over a specific period of time. This approach enables us to identify potentially profitable trading pool investment opportunities, irrespective of liquidity concentration. We will focus on trending pools with high activity within the last 24 hours. Let's dive in and explore the data!

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    TVL Takeaways

    • High TVL does not necessarily translate to high fees for a pool.
    • Stablecoin and pegged asset pairs with high TVL do not earn high fees.
    • Pools with WETH-stablecoin pairs earn the highest fees among the pools with the highest TVL.
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    Volume Takeaways

    • Pools with higher fees of 1% and 0.3% typically have lower volume due to the associated increased cost. However, even with lower volume, these pools can generate significant fees.
    • Pairs with high trading volume, such as USDC-WETH, generate significant fees across multiple fee regimes (0.01%, 0.05%, and 0.3%).
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    The dots are scaled by TVL.

    In the following section, we will examine the correlation between APR and various categories such as TVL, Volume, and Fee. This analysis aims to identify any significant relationship between these categories.

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    APR Takeaways

    • None of the pools with the highest TVL or volume are present in this list of top APR pools.
    • The pools with the highest APR are typically composed of the long-tail of crypto assets. This indicates that the pairs are more volatile, require a larger liquidity range or more active management, and are more likely to have high impermanent loss (IL).
    • Most of the top APR pools are in the highest fee regime (1%).
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    APR-TVL Correlation Takeaways

    • The y-axis is in log-scale and the x-axis is in linear scale.
    • There is a very slight negative correlation between APR and TVL.
    • As the TVL increases, the APR decreases.
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    APR-Volume Correlation Takeaways

    • There is no noticeable correlation between Volume and APR.
    Correlation Analysis
    APR Analysis
    TVL and Volume Analysis
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    Trailing 7-Day Performance

    In the final step of our analysis, we will observe the returns of the 24-hour trending APR pools over the last 7 days.

    Trailing 7-Day History Takeaways

    • This chart helps to distinguish between pools that generate consistent APR returns over time and those that are newer and unproven.
    • It also reveals the impact of trading activity slowdowns that typically occur over the weekends.