Osmosis HODLers vs LPers vs Stakers

    How are users in incentivized pools behaving vs. non-LP OSMO token holders?

    What about versus stakers? Create an analysis that shows activity for the various types of OSMO holders and chart out some additional activities they’re undertaking. Are users LPing or staking more likely to increase their amount staked? What group is receiving the most IBC transfers into Osmosis?

    Methodology

    Look into the different people who are staking and delegating along with those who are just regular holders and try to find a pattern.

    What is Osmosis?

    Osmosis uses the SDK of another blockchain the Cosmos and is an automatic market maker.  It makes use of IBC, which is inter blockchain communication and helps to facilitate cross-chain transactions. What this means is that Osmosis is a DEX, decentralized exchange that is designed specifically for Cosmos, with the hope to spread to other blockchains in the future.

    What is Staking?

    Staking crypto is essentially when you are lending your assets to support the blockchain network and confirm transactions. It works because of the proof of stake model which is used to process payments. This method is used because it is more energy efficient than to work with the proof of work model. Even though you need a lot of coins to become a validator with just a few coins you can loan or pledge your money to a validator and they will give you rewards based on your contribution. The more assets a validator has the higher proportion of rewards you will receive.

    What is Liquidity Providing?

    A liquidity provider is someone who acts as a market maker and locks up their assets as in a pool along with many others to allow for faster transactions. By having lots of crypto locked up people earn fees and rewards, while also being able to remove their assets at any time.

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    Staking / Delegating

    These three graphs are going to look into accounts that are delegating their assets to Osmosis and what the patterns are. First thing to notice is that in all of 2022 there have been 212,000 unique delegators. The top graph is going to look at total times people have delegated their assets and it is slightly different from the graph below, but not too different. They follow the same pattern, almost exactly, but what we can notice is that the scales are slightly different. What this means is that staking has been fairly consistent and for the most part each staker is most likely to only stake once a day, but there are some that are delegating more than once a day, which would lead to the difference in scale.

    Liquidity Providing

    In the next graph we are going to look at liquidity providers and we can see that this pattern is far different than what we noticed with delegating. The amount of delegators have been increasing during the year or holding steady, but since the crash there has been a major drop in the amount of people providing liquidity and that is no surprise. By providing liquidity you are putting yourself at risk because a pool works the same as a bank. If everyone tries to take their money out at once their is not enough and this is why people get paid to put their money in. As more and more people try and remove their money from crypto because of the drop naturally liquidity pools will shrink. This puts people at an increased risk of losing their assets and due to this risk most people are not willing to provide liquidity.

    Regular Holders

    These next graphs are going to look into people that are not staking and not providing liquidity. As we can see people are more likely to be delegating their assets than to be doing nothing with them. When we look at distinct use over time there is no surprise that the numbers are very small. First thing we can notice is that people who are just holding their OSMO or other assets are just hoping that the value goes up and nothing more. Due to this people are far less likely to be making transactions and as you can see that is exactly what we are seeing going on. This being said many of those who are just going to hold onto their crypto are going to try and make trades throughout the day, day trading, to make money and this is most likely why the distinct users transactions are very low and the total number of transactions are very high.

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    Conclusion

    • People are more likely to delegate to validators than to be liquidity providers because of the additional risk from the market at this time
    • Regular holders are making far more trades on average, which is most likely not everyone, but just some accounts trying to make money off of day trading
    • Liquidity Providers are getting more IBC transfers on average than Delegators
    • The amount of people and times liquidity is being provided has dropped dramatically during the year