Try Quests to earn cryptoAxelar - 1. Do incentivized wAssets impact transfer volumes on Axelar?
\n How do incentivized wAssets on Osmosis impact token transfer volumes for Axelar?
Background: Most "wrapped" assets (WETH, WMATIC, WBNB, WAVAX, etc.) arrive on Osmosis via the Axelar bridge. Osmosis governance decides how to incentivize liquidity pools containing these assets. In the past two months we have seen incentives pass for wMATIC, wBNB, and wAVAX.
Task: Examine the impact of “bootstrapping” proposals on Axelar bridge volumes and fees paid. Did they sufficiently incentivize users to transfer external assets into Osmosis via Axelar’s bridge, or were the assets deposited into the respective pools already on Osmosis. Analyze the results in aggregate and by asset.
Goal: Identify if Axelar should work with Osmosis to incentivize more wrapped assets, in order to increase volume over Satellite and Squid.
✨Introduction
Bootstrapping proposals refer to the incentives that are offered by the Osmosis governance to incentivize users to deposit specific assets into liquidity pools on the platform. These incentives are designed to help build up liquidity for these assets and attract more users to trade them. The ultimate goal is to make these assets more accessible and increase their demand, which can help to drive up their value.
Bootstrapping proposals can take many forms, such as transaction fee discounts, rewards for providing liquidity, or even seed funding for development of the underlying asset. The specifics of the incentives will vary depending on the asset in question and the goals of the Osmosis governance. Overall, bootstrapping proposals are an important tool in DeFi for fostering the growth and development of new assets and liquidity pools.
WBNB is the wrapped version of BNB and is the most liquid, volatile asset across Binance Smart Chain DeFi.
BNB is used to pay for goods and services on Binance, settle transaction fees on Binance Smart Chain, participate in exclusive token sales and more.
WMATIC is the wrapped version of MATIC that enables use on the Polygon network. WMATIC is similar in liquidity to WETH as the most liquid, volatile asset across Polygon.
AVAX is the native token of the Avalanche platform and is used to secure the network through staking, pay for fees, and provide a basic unit of account between the multiple subnetworks created on the Avalanche platform. wAVAX is the wrapped version of AVAX that enables use on the Avalanche network.
🛠️ Method
The current dashboard deals with the affects of incentivized wAssets on transfet volumes on Axelar.
For this purpose I evaluated the impact of three Bootstrapping proposals such as: wBNB, wMATIC & wAVAX by probs number: 360, 386 & 410, respectively.
The evaluated metrics are include:
- Transactions and users counts in total and over time.
- Transferred volume in total and over time.
- Generated Fee volume and distribution of transactions and transferrer count.
- The aforementioned metrics have been evaluated over before in after approving bootstrapping proposals.
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⏳ wMATIC and Bootstrapping Proposal Impact (#386)
⏳ wBNB and Bootstrapping Proposal Impact (#360)
🔎 Findings:
The incentivizing proposal for wAVAX has approved in Jan 31th.
The charts above show the transfer transactions, transferrers, transferred volume and fees paid over time.
As can be clearly seen the approving of proposal has impacted significantly the assessing metrics on Axelar network, so that all of metrics peak at higher of its points in approving date in Jan 31th.
The aforementioned metrics dramatically spiked in Jan 31th, the day of approving proposal to more than 2x rather than previous days, and stayed for some days above the moving average 7 days, and then fell to below the MA in the days after.
The fees paid stayed above daily moving average.
The following visuals represent the cumulative volume and transactions count growth over two period times.
🔎 Findings:
In the charts above the growth of transferred volume and transactions count after approving date are clearly distinguished.
So that can be seen since June 2022 till the day of approving proposal and through the regular incentivized proposal, the total transferred volume was less than 2K, while after the Jan 31th, after ending the voting date and passing the proposal the volume spiked to over 9.2K over only 16 days.
The transactions count follow the transferred volume, too.
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⏳ wAVAX and Bootstrapping Proposal Impact (#410)
🔎 Findings:
The PIE charts above represent the aforementioned metrics in total states.
The differences over regular and bootstrapping proposals are significant.
The following charts represent the distribution of unique Bridgers and bridge transactions count based on average transferred volume.
As can be seen the unique transferrers count among the range of less than 1 AVAX was larger in regular than bootstrapping proposal
but, the count of unique users and transactions with 10 to 50 and 100 to 500 AVAX increased over bootstrapping than regular proposal.