Cosmoverse Free Play: EVMOS

    Introduction


    EVMOS

    Evmos is an Ethereum Virtual Machine (EVM) hub that launched on the Cosmos blockchain in April after years of development. The layer one blockchain allows users and developers to deploy smart contracts and assets from Ethereum for use in the Cosmos ecosystem [1].

    Osmosis DEX

    Osmosis is an advanced automated market maker (AMM) protocol that allows developers to build customized AMMs with sovereign liquidity pools. Built using the Cosmos SDK, Osmosis utilizes Inter-Blockchain Communication (IBC) to enable cross-chain transactions [2].

    What’s in this dashboard?

    In this dashboard, we analyze the LP and trading activity of EVMOS in Osmosis. We’ll look at trends in key metrics such as TVL, trading volume, active wallets (LPs and traders), and user growth.

    Image source: chaindebrief.com

    Image source: BeInCrypto.com

    Methodology


    1. Pool liquidity is tracked using LP actions from osmosis.core.fact_liquidity_provider_actions.
      • For this analysis, we’ll focus on the EVMOS/OSMO pool (Pool #722).
      • Using the ratio of LP tokens minted vs EVMOS/OSMO deposited, we can estimate the pool reserves, and together with price info, the pools total liquidity or TVL at any date.
      • We’ll also track LP positions per liquidity provider (wallet) to monitor the number of active LPs.
    2. Next, trading activity is tracked using swap transactions from osmosis.core.fact_swaps.
      • From this data, we’ll calculate trading volume, number of active traders, and the average transaction size.
      • We’ll further break down trading activity by EVMOS swap direction (buy or sell) and which tokens are traded to/for EVMOS.
    3. For most of the dashboard, we’ll use trend charts (bar/line) to track changes and trends in LP and trading activity. Specifically, we’ll narrow down activity in the past week and compare it to previous periods.
    4. Lastly, we’ll highly any significant events which appear to have an impact on LP and trading metrics.

    Definitions


    • Liquidity provider (LP). A user (tracked by wallet address) who have added liquidity to a pool by depositing tokens, in this case into the EVMOS/OSMO pool.
    • Active trader. A user who has swapped tokens for another token, in this case, EVMOS for another token.
    • Buy. In this context, “buying” EVMOS means converting another token into EVMOS through a swap in Osmosis.
    • Sell. In this context, “selling” EVMOS means converting EVMOS into another token through a swap in Osmosis.

    Liquidity Growth: EVMOS/OSMO Pool

    This section shows the growth of the EVMOS/OSMO pool in terms of total liquidity.

    Liquidity Provider Activity: EVMOS/OSMO Pool

    This section explores the activity of liquidity providers and how they impact the total liquidity in the EVMOS/OSMO pool.

    Trading Activity: EVMOS Token

    This section shows trading stats such as volume, active traders, average transaction size, etc.

    Conclusion


    In summary, we have observed the following:

    1. From reaching a peak on Sep 17 to dropping towards the end of September, liquidity in the EVMOS/OSMO pool has started to recover this month of October, largely driven by EVMOS’ price volatility.
    2. Liquidity provision into the EVMOS/OSMO pool has slowed down and plateaued in the past week and is seeing a net outflow of liquidity.
    3. While the total number of LPs is still growing, the number of new LPs per day has decreased recently.
    4. Trading volume in the past few weeks has been slowly decreasing day-to-day, driven by less active traders per day and generally lower trading frequency per day.
    5. The halting of the Osmosis chain last Oct 3 appears to have negatively impacted trading frequency and the number of daily active traders.
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    • The EVMOS/OSMO pool’s liquidity has grown to $7.13M as of Oct 10, less than 5 months since the pool was created.
    • This month (Oct), total liquidity has recovered by approximately +$1.02M from the recent dip by the end of September.
      • This is still 29% below the pool’s TVL peak of $10.03M on Sep 17, 2022.
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    • This October, there is a slow decline in the pool’s EVMOS reserves.

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    • Together with the recent price recovery of EVMOS, this indicates a lower rate of new liquidity provision compared to previous months.

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    • The recent trend in pool liquidity was largely impacted by volatility in EVMOS’ token price.

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    • The large decrease in pool liquidity between Sep 17 to Sep 30 coincides with the huge drop (-57%) of EVMOS’ price.

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    • The recent recovery in pool liquidity this October also coincides with the +25% price recovery of EVMOS.

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    • The chart on the left shows another view of the apparent slowdown in new liquidity provision to the pool, especially in the past week.

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    • Running supply of LP tokens appears to have plateaued this October.

      • Mints have decreased and more LP tokens are burned than minted, indicating a net removal of liquidity.

    Please zoom into the chart to have a better view of October stats.

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    • In the past 2-3 days, there is a net outflow of liquidity from the pool as a direct result of LPs withdrawing their funds.

    TVL trend in the past 30 days is driven more by EVMOS’ token price as opposed to LP activity.

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    • Majority of active liquidity providers per day top up their LP positions (add liquidity to the pool).
      • Daily LPs adding liquidity is on a slight downtrend this October.
      • Since Oct 8, the number of LPs adding liquidity has started to decrease.
    • The fraction of LPs removing liquidity per day is very small, typically less than 50 wallets per day.
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    The total number of liquidity providers (with active LP positions) is still growing, although it appears to be slowing down recently.

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    • EVMOS trading volume in Osmosis has been slowly trending downward since Sep 17.
      • From more than $800k per day to less than $600k.
    • Historically, the trading volume of EVMOS has roughly moved together with its market price
      • e.g. increasing volume coincide with price uptrends, drops in volume coincide with price drops
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    • A large majority of EVMOS trading volume is just against 3 other tokens: USDC, ATOM, and OSMO.
    • When buying EVMOS, ATOM typically has the highest volume, closely followed by USDC.
    • When selling, traders sell EVMOS for USDC the most in terms of volume, followed by ATOM.
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    • In terms of daily active traders of EVMOS, typically there are more unique sellers than unique buyers per day.

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    • There were 2 large drops in daily active traders:

      • on Sep 17, during EVMOS token price peak
      • another one on Oct 3, when the Osmosis chain was halted due to a software bug.
    • Transaction frequency generally follows the same trend as the number of daily active traders, with corresponding drops in frequency on the same dates mentioned above.

    • Generally, EVMOS sees more frequent sell transactions (at lower amounts) and less buy transactions (at higher amounts).

    • In the past week:

      1. The number of active traders has been decreasing.
      2. Trading frequency is also decreasing.
      3. No consistent trend in average trade size