Try Quests to earn cryptoVelodrome Health
Question:
Create at least 3 metrics on Velodrome with a description for each that showcase traction and success in a data-driven manner.
Most importantly, your insights should help our readers answer the question "How healthy is this project?"
Solution:
The criteria I chose to measure health on this platform are:
- The amount of the token is locked
- Balance of pool tokens based on current volume and price
- swap volume in different pools
According to my analysis, totally. 130M dollars is locked currently.
According to this link, the total circulation supply is equal to 1.2B dollars. So I can say 10% of all $VELO are locked currently.
Conclusion:
I reviewed three metrics as health metrics for a DeFi platform in this dashboard. My criteria are, respectively, the volume of tokens locked in the desired platform, the liquidity balance in the pools of this platform, and the daily swap volume in each pool. According to my observations, Velodrome has performed well in terms of locked tokens and users showed their trust in this platform, but the balance of tokens in some pools was not correct, which is one of the signs of unhealthiness. Regarding the volume of the daily exchange, we can say that except for an unexpected incident on August 5, it had a healthy performance.
1. The amount of the token is locked
In my opinion, one of the criteria that shows the health of the platform is the number of tokens that are locked by their users.
The higher the number of tokens locked by users, it means that users are hopeful about the future of the platform and token.
Proper distribution of locked tokens is another reason for the health of a platform too. So we like that the tokens are not only locked by certain people but many users are involved in this.
so let’s see distribution of luck duration and users per lock duration in the below charts.
2. Balance of pool tokens based on current volume and price
In my opinion, another sign of the health of a platform is that the dollar value of the tokens in its pools are close to each other. Since two tokens must have the same dollar value when they are added to the pool, we can conclude that the difference in their dollar value after some time indicates that the pool is not working properly and tokens are trading higher or lower than their true value.
To figure this out I took the number of each token in each pool and multiplied it by their current average price in the market.
The below chart shows the dollar volume of each pool based on token0 and token1.
According to my analysis, the most common duration is 1 week. After that is 4 years.
So we can say, 51% of the volume is locked for more than 1 year. when people locked their token for more than 1 year that is mean they trust the platform because many risks can threaten a platform. including hacking, loss of token value, etc.
According to my analysis, most of the users locked their token for 4 year.
So we can say different users locked their token not only special user. This is important thing for a a platform that most people used their features.
This chart shows the daily locker per day.
As you can see:
- 16M $VELO locked in the first day (Jun 15th) for 1 year.
- 12M $VELO locked on Jul 27th for 4 years.
So based on this section, my opinion is that Voldrome doesn’t work well in some pools and health doesn’t exist in some pools of this platform.
As you can see, there is no balance between tokens in some pools. So the tokens are not traded at their real value in the market, but rather lower or higher. Totally, this issue is not a good thing for a platform.
In Velodrome, the most difference between two tokens of a pool exists on vAMM-OP/USDC pool. There are 7.2M dollars OP and 3.2M dollars USDC currently, so we can say each OP traded less than the real value in this platform.
So based on this section, my opinion is that Voldrome doesn’t work well in some pools and health doesn’t exist in some pools of this platform.
As you can see there are a spike and a deep low on the daily swaps volume chart.
on Jul 29th the volume of the swap was on maximum its amount and was equal to 94M dollars. Also, the deep low of swaps volume was on Aug 5th and was equal to 2.3M dollars.
Totally the daily average swaps volume was between 100 and 200 and don’t exist any notable change that is good.
This chart shows the volume of the swap per day based on each Velodrome pool.
As you can see, on July 29th, when we saw the highest daily swaps volume on this platform, only 51M dollars of swaps were done in the OP/USDC pool. If you remember in the chart in section 2, this pool was identified as an unhealthy pool.
As you can see, the most popular pool based on swap volume is OP/USDC pool.
The unexpected swap volume of this pool can be another reason for its unhealthy.