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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.
Introduction:
In response to the FTX insolvency, the crypto markets have been in a risk-off mood, with asset prices falling precipitously for all crypto tokens, fungible and nonfungible. The aggregate market cap of all crypto currencies fell 23% to $786 billion from $1.02 trillion within four days.
Solana’s current downward slide is part of a larger market selloff triggered by the FTX collapse. Data from Solana Compass shows that Epoch 370, is set to end at around 8.30 AM UTC on Nov. 10. The website's dashboard showed that more than 50 million sols were scheduled to be unstaked by validators. This represents 13% of the coin’s circulating supply and will be the second-largest token unlock of solana in terms of the number of coins being unstaked by validators.
Questions:
Let's see how users have reacted to this wild week in Web3. Have behaviors changed? Analyze growth in Osmosis Volumes & User Count this week.
- Has more money flowed into Osmosis this week compared to the past few weeks/months?
- Where is this money coming from? Centralized Exchanges?
- Have wallets moved more into stables?
Methodology:
I answer this question in two separate parts.
- Comparing the flowed into Osmosis during FTX collapse and before this event in the number of bridge transactions, unique bridgers, and volume of bridge transactions. Also, I found the top source that transferred the most liquidity to Osmosis. For this purpose, I used core.fact_transfers table of Osmosis schema. For finding volume in USD I should credit Ali3N.
- The impact of FTX collapse on swap activity. Is there more desire to swap to stablecoin or not? For this purpose, I used core.fact_swaps table of Osmosis schema.
All the analysis and statistics are from September 8 onwards (2 months before FTX collapse).
Number of bridge transactions into and out of Osmosis:
The following charts show the number of transfer transactions into Osmosis and out of it.
As you can see:
- There isn’t any notable change in the number of bridge transactions into Osmosis during and after the FTX collapse.
- The volume of bridge transactions out of Osmosis has increased slightly during and after the FTX collapse.
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