Questions

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Q10. 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?"

In this work, our 3 metrices are

> > 1. Vesting Behavior > 2. Fees generated by pools > 3. Voting Behavior

Motivation

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As stated in this tweet of Velodrome

> The more fees a pool generates, the more votes it gets. The more votes it gets, the more TVL and volume it attracts. The more volume, the more fees it generates and votes it attracts. Andre’s “self-optimizing” AMM design in action. > > \

This makes us understand a lot about Velodrome mechanism and what matrices are important to track. That’s why we are interested in these 3 matrices; Vesting Behavior, Fees generated by pools, and Voting Behavior.

Luckily, there are new Velodrome tables provided by Flipside, which makes this work much easier to complete.

1. Vesting Behavior

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We think it is important to study about trend of Vesting Behavior of users. Other than it is involved with Andre’s “self-optimizing” AMM design, it indicates more aspects related to Velodrome’s health including demand of VELO token, because users have to buy VELO to vest.

From optimism.velodrome.ez_velo_locks table, we plotted 5 graphs including

• Daily value of VELO locked with each vesting period

  • we can see that daily value locked is dropping recently from the highest peak on 27 Jul (1 M USD).
  • however, if we look at bigger picture, compare to June period, the trend of value locked has increased significantly.

• Daily vesting Tx count and Daily number of unique wallet vesting

  • These 2 graphs indicates similar thing as the first one; the Tx and wallets count are dropping recently, but considered increasing in big picture.

• Daily Lock and Unlock amount and Accumulated Lock and Unlock amount

  • It shows that, daily, users always deposit more than withdraw

  • In these 2 months, users deposit in total of 6.3M USD and withdraw 2.1M USD, causing positive TVL of 4.2M USD

2. Fees Generated by Pools

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High Fees generated by pools indicates high swapping activity in the platform, and would attract users to vote on that pool

For simplicity, yet, still effective, we analyze only Top 10 pools that have highest aggregated Fees generated

From optimism.velodrome.ez_swaps table, we plotted 4 graphs below

• Daily Fees generated by Top 10 pools (USD) and Daily Tx count from Top 10 pools
  • It gives similar intuition as Daily Locked value described above; Daily Fees and Tx count is dropping in short term, but is still high compare to that in June.

We also track number of new users from optimism.velodrome.ez_swaps table

• We can see that number of new users drops since late July
• But yesterday (Aug 16), the number happened to be the highest peak (2,666 new users), which is interesting what will be going on next

3. Voting Behavior

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Voting Behavior indicates if the Fees generated is still in acceptable level compare to risk of Vesting their VERO, and also indicates that Andre’s “self-optimizing” AMM design is still healthy or not. We focus on the same 10 pools as in the previous section.

From optimism.velodrome.ez_votes table, we plotted 4 graphs

• Daily Vote-Unvote difference in Top10 pools and Accumulated Daily Vote-Unvote difference in Top10 pools

  • Users are allowed to vote on every Wednesday, that’s why the value is positive on every Wednesday.

  • Mostly, daily sum of Vote-Unvote is positive, but in Aug 4, there is large negative, and it is large enough to make total sum of past 1.5 months become negative, as we can see in Accumulated Vote-Unvote graph.

  • However, last Wednesday, it is the first week that there are more Unvotes, which indicates bad sign of situation.

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• Daily Vote and Daily Unvote
  • Number of Votes is quite stable on every Wednesday, except last week, it drops to half of value.
  • Number of Unvotes is quite similar to that of Votes, but last 2 weeks there was 2 consecutive high Unvotes date (3-4 Aug) causing large negative sum of vote
  • Last week, Voting activities seem to drop, both Vote and Unvote

Conclusions

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Vesting Behavior and Fees generated by pools indicate the same picture

• In short term, users activities on Vesting and Swapping tend to drop.
• However, if we compare to that in June and beginning of July, users activities lately are much better.

Voting Behavior shows different sign of situation

• Votes/Unvotes activity is dropping last week, while the daily sum of Vote-Unvote become highly positive

Number of new users

• Number of new users keeps dropping since late July, but yesterday, the number happened to be the highest peak (2,666 new users), which is interesting what will be going on next

  \

Overall, Velodrome health is a little bit worrisome, because the trend of all activities seem to be going down.

If the protocol can do something to incentivize users to drive the Andre’s “self-optimizing” AMM design, it would come back in better shape.