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What is Osmosis?
Osmosis is a proof-of-stake blockchain built using the Cosmos SDK. It is built specifically to support automated market maker (AMM) applications, such as the Osmosis decentralized exchange.
What is Superfluid Staking?
What is Superfluid Staking? Superfluid Staking is the latest innovation on Osmosis, a proof of stake blockchain and decentralized exchange application that enables users to provide liquidity, swap, and access staking (via the Keplr wallet) for tokens from blockchains from across the Cosmos ecosystem.
What Slashing?
In order to keep validators operating within the bounds of the protocol, a mechanism called slashing is used to disincentivize bad behavior. A slashing incident will burn a portion of the validator's stake depending on the severity.
Introduction
Welcome to our analysis on the impact of a slashing event on the OSMO liquidity of the 16 SuperFluid Staking pools currently available on Osmosis. These pools include 1, 678, 704, 712, 674, 722, 9, 604, 497, 812, 584, 3, 481, 42, 463, and 15. In this analysis, we will be examining the distribution of superfluid-staked OSMO across these pools and identifying which validators have the most SFS OSMO in total and per pool. By understanding the distribution and concentration of SFS OSMO, we can better understand the potential impact of a slashing event on the liquidity of these pools.
Methodology
To analyze the impact of a slashing event on the OSMO liquidity of the 16 SuperFluid Staking pools currently available on Osmosis, we will follow these steps:
- Obtain data on the distribution of superfluid-staked OSMO across these pools. This data can be gathered from the Osmosis platform or through external sources such as staking pools websites or on-chain analytics tools.
- Identify the validators with the most SFS OSMO in total and per pool. This information can be obtained from the data gathered in step 1 or through additional research on validator profiles and their associated staking pools.
- Analyze the potential impact of a slashing event on the liquidity of these pools by considering the following factors:
- The concentration of SFS OSMO within each pool: If a large percentage of OSMO within a pool is held by a single validator, that validator may be at a higher risk of being slashed and potentially impacting the liquidity of the pool.
- The overall size of each pool: Larger pools may have more OSMO to absorb the impact of a slashing event, while smaller pools may be more vulnerable to liquidity issues.
- The distribution of SFS OSMO across validators: If SFS OSMO is distributed evenly among multiple validators within a pool, the impact of a slashing event may be less severe compared to a situation where a large portion of OSMO is held by a single validator.
- Based on this analysis, make recommendations for mitigating the potential impact of a slashing event on the liquidity of these pools. This may include diversifying SFS OSMO across multiple validators or pools, or implementing strategies to reduce the risk of validators being slashed.
Pool Staking Activity
Description
The first graph shows the daily value of a selected liquidity pool in US dollars. This value represents the total value of all assets contained in the pool, including any fees collected.
The second graph shows the daily price of the liquidity pool token, which is a representation of the value of the assets contained in the pool. This price may fluctuate over time due to market forces, such as supply and demand, as well as other factors that can affect the value of the assets in the pool.
The third graph shows the daily inflow and outflow of funds into and out of the selected liquidity pool. The inflow represents the amount of money that is being added to the pool, while the outflow represents the amount of money that is being removed from the pool.
The fourth graph shows the daily net flow of funds into and out of the selected liquidity pool.
Pool SuperFluid Activity
Analysis
Based on the first graph, it appears that the release of superfluid staking resulted in a significant increase in activity for this particular staking system. This could be due to a variety of factors, including increased interest in the system, the addition of new features or improvements, or the introduction of new incentives for stakers.
The second graph suggests that most pools have a diverse set of validators, with a large variety of individuals or organizations participating in the staking process. This could be a positive sign, as it suggests that the system is decentralized and not overly reliant on any single validator.
The third graph indicates that the largest validator in each pool is no larger than one-quarter of the total stake volume. This could be seen as a good thing, as it suggests that no single validator has too much influence over the system and that the distribution of stakes is relatively evenly distributed.
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Osmosis slashing activity
Conclusion
Based on the analysis provided, it appears that the release of superfluid staking has resulted in a significant increase in activity for this particular staking system. The liquidity pools associated with this system appear to have diverse sets of validators and relatively evenly distributed stakes, which may be seen as positive signs for the overall stability and security of the system. The largest percentage of a pool that a validator could be at risk of loss through a slash event is less than 1% of the pool, as a slash event is defined as a loss of 5% of the stake, and the largest validators in most pools hold less than 20% of the total stake. This means that the risk of a slash event significantly impacting the liquidity of a pool is relatively low, as the largest validators in most pools do not hold a significant enough percentage of the total stake to be at risk of a slash event.