Osmosis (OSMO): A DEX for the Cosmos Ecosystem

Osmosis is a DEX protocol, which means it uses smart contracts to determine the price of digital assets, to produce liquidity via a peer-to-peer (P2P) methodology, and to exact trades between users. This approach to an exchange platform is known as an AMM — a DEX protocol that prices crypto assets in liquidity pools. Contributing tokens to these pools helps foster decentralized liquidity, which is then used to facilitate trades on the exchange. Participating as a liquidity provider (LP) can earn you both trading fees and newly minted LP tokens as incentives for participation.

A key innovation within the Osmosis protocol structure is superfluid staking, which allows users to both stake tokens while simultaneously using them to provide assets to a liquidity pool. This means Osmosis users are rewarded for helping secure the blockchain while staking, and receive reward fees associated with liquidity pool transactions.

Questions:

Analyze how users join pools on Osmosis.

• Do they dive in headfirst (add both assets; joinpool) or do they wade in carefully (singleside; join swap extern amount in).
• Also analyze how deep the pool is (typical swap size in token and USD for both activities).

All charts showed in weekly timeframe.

Methodology:

The main challenge of this bounty is separating the LP transactions into two categories: The transactions regarding adding a single asset and the transactions regarding adding both assets.

For this purpose, I tried to find all transactions with a similar tx_id from the core.fact_liquidity_provider_actions table of Osmosis schema. if the currency was different, the tx_id falls to both assets LP, otherwise falls to the single asset LP category.

• The most popular asset in terms of the number of transactions, the number of unique users used, and the volume of transactions is OSMO. The second one in terms of the number of transactions is STARS and in terms of the number of unique users used and volume of transactions is ATOM.
• The currency that has the highest swap size in USD is LUM with more than $1600 per transaction. The second one is NETA with more than $1100 per transaction and the third one is ATOM with more than $1000 per transaction.
• The currency that has the highest swap size in $token is LUNC.

Singleside LP transactions breakdown by assets:

In the second step, we are going to deep into each type of LP transaction. Here are singleside LP transactions.

Both assets LP transactions breakdown by assets:

In the second step, we are going to deep into each type of LP transaction. Here are both assets LP transactions.

Comparing Singleside LP transactions Vs. Both assets LP transactions:

In the first step, we tried to compare singleside LP transactions and both assets LP transactions in terms of the number of transactions, number of unique users, and volume of transactions.

• Except for two time periods (late September to mid-December 2021 and mid-January 2022 to its end), there has always the number of singleside LP more than both assets LP. Exactly the same pattern can be seen in the number of unique users.
• In terms of volume, the story changed and both assets LP is more than singleside asset most of the time.
• Totally, ~60% of all LP transactions are regarding adding singleside asset and ~40% are regarding adding both assets LP.
• In terms of the number of unique users is fifty-fifty.
• Totally, 91.5% of all LP volumes are regarding adding both assets and only 8.5% are regarding adding singleside LP.

• The most popular asset in terms of the number of transactions and the number of unique users used is OSMO while the most popular one in terms of the volume of transactions is IOV. The second one in terms of the number of transactions and number of users used is ATOM and in terms of the volume of transactions is OSMO. The IOV spikes in price during the first week of Oct 2021 caused to this result.
• The currency that has the highest swap size in USD is IOV with more than $2.6M per transaction. The second one is LUM with more than $2800 per transaction and the third one is IXO with more than $2300 per transaction.
• The currency that has the highest swap size in $token is LUNC.

Conclusion:

• ~60% of all LP transactions are regarding adding singleside asset and ~40% are regarding adding both assets LP.
• In terms of the number of unique users, the distribution is fifty-fifty.
• 91.5% of all LP volumes are regarding adding both assets and only 8.5% are regarding adding singleside LP.
• The most popular asset between singleside LP transactions, in terms of the number of transactions, the number of unique users used, and the volume of transactions is OSMO.
• The currency that has the highest swap size in USD between singleside asset LP is LUM with more than $1600 per transaction. Also, the one that has the highest swap size in $token is LUNC.
• The most popular asset between both assets LP transactions, in terms of the number of transactions and the number of unique users used, is OSMO while the most popular one in terms of the volume of transactions is IOV. The spikes in IOV price during the first week of Oct 2021 caused to this result.
• The currency that has the highest swap size in USD between both assets LP is IOV with more than $2.6M per transaction. Also, the one that has the highest swap size in $token is LUNC.

References: