Ethereum - Flash Bounty: Post Merge Behavior
Introduction
- The Merge was executed on September 15, 2022. This completed Ethereum's transition to proof-of-stake consensus, officially deprecating proof-of-work.
- The Merge was exciting, however, it also created uncertainties, which affected users behavior, especially around ETH token.
- In this dashboard, let’s compare users behavior around ETH activities such as ==ETH staking, ETH liquidity mining, ETH swap, ETH transfer to CEX== before and after the Merge.
Note
- Analysis time: Aug 1 - Sep 24, 2022
Approach
- I look at daily metrics and compare ==before merge (Aug 1 - Sep 14)==, and ==after merge (Sep 16 - Sep 24)==. I also breakdown to ==new and return user==.
- In ETH liquid staking and ETH liquidity mining sections, I also have a small ==section for a specific platform which can be changed by changing parameter value at the top of this dashboard==.
Definition
- A user is a
new
user of a specific action on a given day if performing the action first time on that day, otherwise, is areturn
user.
Structure
- Gas fee per transaction
- ETH staking: examine user behavior of ETH deposited in the Eth2 Deposit Contract.
- ETH liquid staking on Lido, Rocket Pool, & Ankr: examine user behavior of ETH deposited on 3 top liquid staking platforms. More about ETH liquid staking platform here.
- ETH liquidity mining on Uniswap, Aave, Compound, & Maker: examine user behavior of ETH deposited to/withdrawn from liquidity pool.
- ETH swap to/from: examine user behavior of ETH swap on DEXs.
- ETH transfer to/from CEX: examine user behavior of ETH transfer to/from CEX.
- Key highlights
- Conclusion
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- Except for some big days close to the merge, the general trend of ETH staking is up. More ETH deposited, more depositors, & more deposit per depositor.
- This is positive as the more validators, the more decentralized of the ETH POS network.
- Looking at the new/return depositor breakdown, we can see that the main drive of higher ETH staking after the merge is new depositors.
- After the merge, return depositors also deposited more than before the merge.
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- After the merge, daily liquid staking deposit volume on Lido increased 10x - 20x, depositor increased 2x, while deposit per depositor basically flat.
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- Similar to ETH staking, the main drive of higher deposit volume after the merge is new depositors.
- Return depositors also increased.
Apply liquidity_staking_platform parameter at the top to see different platform.
Below comments are for Lido.
- 73% of ETH liquid staking happened on Lido.
- After the merge, ETH deposited to these platforms increased 10x - 20x.
- Lido, Rocket Pool have had the most gain in ETH deposited, Ankr hasn’t changed much.
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- The largest platform is Uniswap, accounts for 85% in total deposit volume, following by Aeve, Compound, & Maker.
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- Similar to deposit, Uniswap accounts for 84% in total withdraw volume, following by Aeve, Compound, & Maker.
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Apply liquidity_mining_protocol parameter at the top to see different platform.
Below comments are for Uniswap.
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- Close to the merge, daily liquidity mining deposit volume on Uniswap gradually decreased. Then after the merge, daily liquidity mining deposit volume on Uniswap increased to the level of 1 month ago.
- After the merge, daily depositor has been higher than before the merge baseline. While deposit per depositor increased higher than before the merge in last 3 days.
- Contribution of new depositors are small → the total trend is basically the trend of return depositors.
- Last 3 days saw deposit per new depositor increased higher than before the merge.
- Similar to deposit, close to the merge, daily liquidity mining withdraw volume on Uniswap gradually decreased. Then after the merge, withdraw volume on Uniswap increased to the level of 1 month ago.
- After the merge, both daily withdrawer and withdraw per withdrawer haven’t changed much.
- Again, contribution of new withdrawers are small → the total trend is basically the trend of return withdrawers.
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- Before the merge, there were more swap to than swap from ETH. However, after the merge, swap from has been higher than swap to ETH.
- Since the merge, swap to volume is increasing, though still in the base line of before the merge.
- Swapper hasn’t changed much, while swap to per swapper is increasing higher than before the merge high.
- Swap to volume and swapper haven’t changed much.
- The main drive of swap per swapper increase is return swappers as new swappers contribution is small.
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- Similar to swap to volume, since the merge, swap from volume is increasing, though still in the base line of before the merge.
- Swapper hasn’t changed much, while swap to per swapper is increasing higher than before the merge high.
- Again, swap from volume and swapper haven’t changed much.
- The main drive of swap per swapper increase is return swappers as new swappers contribution is small.
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- Last 3 days before the merge, transfer to CEX volume surged 3x vs baseline. After the merge, volume transfer to CEX has decreased to the baseline level of before the merge.
- Aug 17 saw a 8x surge in daily transfer to CEX volume.
- Aug 4, 2022 saw a 4x surge in daily sender, while transfer per sender hasn’t changed much.
- The surge in volume on Aug 17 was from new senders. However the surge in last 3 days before the merge was mostly from return senders.
- The surge in sender on Aug 4 was from new senders.
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- The merge on Sep 15 saw the highest surge in volume transfer from CEX, 6x higher than baseline of before the merge.
- After the merge, volume dropped and then increased gradually to the baseline of 1 week before the merge.
- However, sender has been decreasing both before and after the merge, while transfer per sender hasn’t changed much except for Aug 20 & Sep 17.
- The main drive of the surge on Sep 15 was return senders.
- The surges in transfer per sender on Aug 20 & Sep 17 was from new senders.
Key highlights
- Gas fee
- Though gas used per transaction increased after the merge, generally, ==fee per transaction is lower== than before the merge due to gas price per transaction decreased.
- This is positive to ETH network usage as a transaction fee gets cheaper, users are more willing to use the network.
- ETH staking
- Except for some big days close to the merge, ==the general trend of ETH staking is up==. More ETH deposited, more depositors, & more deposit per depositor.
- This is positive as the more validators, the more decentralized of the ETH POS network.
- Looking at the new/return depositor breakdown, we can see that ==the main drive of higher ETH staking after the merge was new depositors==.
- ETH2 liquid staking {Lido}
- After the merge, daily liquid staking deposit volume on Lido ==increased 10x - 20x==, depositor increased 2x, while deposit per depositor basically flat.
- Similar to ETH2 staking, ==the main drive of higher deposit volume after the merge is new depositors==.
- ETH liquidity mining {Uniswap}
- Close to the merge, daily liquidity mining deposit volume on Uniswap gradually decreased. Then after the merge, deposit volume on Uniswap ==increased to the level of 1 month ago==.
- After the merge, daily depositor has been higher than before the merge baseline. While deposit per depositor increased higher than before the merge in last 3 days.
- Contribution of new depositors are small → ==the total trend is basically the trend of return depositors==.
- Last 3 days saw deposit per new depositor increased higher than before the merge.
- Similar to deposit, close to the merge, daily liquidity mining withdraw volume on Uniswap gradually decreased. Then after the merge, withdraw volume on Uniswap increased to the level of 1 month ago.
- Again, contribution of new withdrawers are small → the total trend is basically the trend of return withdrawers.
- ETH swap
- ==Before the merge, there were more swap to than swap from ETH. However, after the merge, swap from has been higher than swap to ETH.==
- Since the merge, swap to volume has been increasing, though still in the base line of before the merge.
- Swapper hasn’t changed much, while swap to per swapper is increasing higher than before the merge high.
- ==The main drive of swap per swapper increase is return swappers== as new swappers contribution is small.
- Similar to swap to volume, since the merge, swap from volume is increasing, though still in the base line of before the merge.
- Swapper hasn’t changed much, while swap to per swapper is increasing higher than before the merge high.
- The main drive of swap per swapper increase is return swappers as new swappers contribution is small.
- ETH transfer to/from CEX
- ==Last 3 days before the merge, transfer to CEX volume surged 3x vs baseline==. After the merge, volume transfer to CEX has decreased to the baseline level of before the merge.
- ==Aug 17 saw a 8x surge in daily transfer to CEX volume==.
- Aug 4, 2022 saw a 4x surge in daily sender, while transfer per sender hasn’t changed much.
- ==The surge in volume on Aug 17 was from new senders==. ==However the surge in last 3 days before the merge was mostly from return senders==.
- The surge in sender on Aug 4 was from new senders.
- ==The merge on Sep 15 saw the highest surge in volume transfer from CEX, 6x higher than baseline of before the merge==.
- After the merge, volume dropped and then increased gradually to the baseline of 1 week before the merge.
- However, sender has been decreasing both before and after the merge, while transfer per sender hasn’t changed much except for Aug 20 & Sep 17.
- The main drive of the surge on Sep 15 was return senders.
- The surges in transfer per sender on Aug 20 & Sep 17 was from new senders.
Conclusion
After the merge, as transaction fee decreased, the general trend across activities such as ETH2 staking, ETH2 liquid staking, & ETH liquidity mining is up, and the main drive is new users (of a specific activity). While ETH swap and transfer to/from CEX surged a lot close to the merge and then dropped after the merge.
Thanks for reading!
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- Note: the merge was not intended to lower gas fee.
- However, fee per transaction is lower than before the merge due to gas price per transaction decreased, even though gas used per transaction increased after the merge.
- This is positive to ETH network usage as a transaction fee gets cheaper, users are more willing to use the network.
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