Liquidity Providers Stats

    Introduction

    • In this Analysis, You will read about Liquidity Providers and Farmers on Sushiswap. I went through Sushiswap LPs and analyzed these parameters:

    • The distribution of various target segments that provide liquidity (LP)

    • The profitability of an LP Provider & Yield Farmer


      Analyzed by Hess - Reading Time Almost 12 Min.

    Method

    I analyzed Liquidity providers and Farmers of Sushiswap on Ethereum and Polygon Blockchains. I added liquidity on Sushiswap and then farm it. I follow my transaction which is 0xc45adcc3fe10f6e9b89ac9e404e9cfd50bf4331b5836698e93ffe12ae0fa0c56 and I understand Sushiswap has to address. One for Liquidity and one for Farm. However, The addresses are different in Ethereum and Polygon. I used the Fact table and extracted mint, deposit, and withdraw events. Sushiswap uses a Router for all activities, for example, Swap. So needed to separate swaps from liquidity and farms. All Data in this dashboard is from the last 365 days and the last 30 days.

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    Share of Chains

    As I mentioned before, The total number of unique wallets on Polygon and Ethereum were similar to each other. But Polygon has more than 60-70% of total Liquidity providers.

    The average number of opened liquidity by Unique wallets is around 2.2 LPs in the last year and 1.9 LPs in the 30 days. Most of users opened 1 Position. The second large group of users opened 2-3 positions. Numbers are similar in the last year and the last 30 days.

    Interestingly, the number of unique wallets on Ethereum and Polygon are the same. However, The total number of Liquidity providers on Polygon is higher than on Ethereum. When we faced Bear Market, The total number of Liquidity providers on Sushiswap decreased compared to last year. I can see some Unusual activities in the last 30 days. On some days, The total number of LPs providers increased significantly. I looked for the reason and found that LAYER3 had some tasks on Sushiswap, especially the polygon network. The Total number of LP providers decreased by under 100 on average daily.

    Farmers

    Let’s look at Farmers on Sushiswap on Ethereum and Polygon. Sushiswap had nearly 10K farmers on Ethereum and 19K on Polygon last year. Numbers are not similar to each other, and farming seems less popular than LPs.

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    The ratio between Yield farmers vs. LP Providers

    Polygon: From August 2021 until January 2022, 30% of users were farmers, and nearly 70% were Liquidity providers. But after that time, the share of Liquidity providers increased, and the share of farmers decreased. 72% of users were liquidity providers. However, these shares have changed in the last 30 days.

    Ethereum: Ethereum users were similar to Polygon, but the only difference is there isn’t any trend on it. On average, 15-25% of users were farmers and others were Liquidity providers.

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    LPs TVL of Sushiswap Vs. Uniswap ( Both LPs and Yield Farms ) - Retail and Protocol

    First, I compared Sushiswap Pools TVL with Uniswap and Curve, Then, I compared Sushiswap retail and protocol pools. It seems Curve and Uniswap pools have higher TVL than Sushsiwap Pools. Pools TVL on all platforms decreased in the last year. Lately, The share of Curve pools has increased.

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    Increase/Decrease LP Providers and Farmers

    Based on the total number of unique wallets, I calculated the daily percentage of Increase and decrease. Until November 2021, the daily change was positive, but the changes were negative.

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    Correlation between profitability vs. length of time

    I divided my findings into four categories based on the length of time. More than 1K$, I counted as a high profit, and below 1000 Dollars, I counted as a low profit.

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    Correlation between profit vs. time of withdrawal

    I think because of the Bear market, Most users faced a loss in Total amount in USD. Because most coins and tokens prices dropped badly. Indeed, the number of users that faced loss decreased lastly, but it happened because the total number of LPs decreased.

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    Profits based on Type of Pools ( Stable LPs Vs. Non-Stable LPs )

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    Liquidity Providers and Farmers on Ethereum and Polygon

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    Bear market impacted on this side of Sushiswap too. The total number of Farmers decreased compared to the last year and the begining of the year. Now Under 20 Farmers have used Farming on Sushiswap in the last 30 days. The reason that total number of farmers increased on July 12th is Layers Tasks. 71% of farmers are farming on Polygon.

    Most pools are Retail pools on Sushiswap as I separated them. From Label tables those pool addresses that don’t have label name, I called Retail and those that have label name, I called Protocol.

    Based on the total amount in USD, There were so many ups and downs. Some days changes were positive, and some days were negative.

    Conclusion

    Liquidity has become less popular these days. Users prefer to save or trade their coins instead of gaining a small number of Fees. Adding liquidity seems is a pro job. Normal users always faced loss.

    THE END

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