Try Quests to earn cryptoLiquidity Providers Stats
Introduction
Liquidity Pools pool tokens so users can make decentralised, permissionless trades. Users and decentralised apps (Dapps) create these pools to profit from use. To pool liquidity, a user must supply equal amounts of the primary token and the base token (usually ETH or a stable coin).
Anyone can provide liquidity to SushiSwap's liquidity pools for SLP tokens (SushiSwap Liquidity Provider tokens). A user who deposits $SUSHI and $ETH into a pool receives SUSHI-ETH SLP tokens. These tokens represent a proportional share of pooled assets, allowing users to reclaim funds at any time. Yield farming is lending or staking cryptocurrency for interest and rewards. Annual percentage yields measure farmers' returns (APY). Yield farming is profitable but risky.
Method
On the Ethereum and Polygon blockchains, I conducted research on the various liquidity providers and farmers of Sushiswap. From what I understand, Sushiswap operates out of two locations. One for the Farm, and the other for Liquidity. On the other hand, the addresses used in Ethereum and Polygon are not the same. Using the Fact table as a resource, I was able to pull out the mint, deposit, and withdraw events. The Sushiswap platform utilises a Router for all of its activities, including the Swap. Therefore, it was necessary to divide swaps from liquidity and farms. This dashboard only contains data from the most recent 365 days and the most recent six months.
What’s the total no. of unique LP providers?
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According to the statistics, the number of people who contributed liquidity is significantly higher than the number of people who were yield farmers. There is almost a sixfold expansion to what we can say.
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One more thing to consider is the fact that almost the total number of users within both groups, i.e. yield farmers and liquidity providers, has decreased over the course of time. When we first started, there were more than 500 people per day who contributed to the liquidity of the system. However, that number has since dropped to less than 100 people. This is also true of the yield farmers, who have decreased from more than 50 people per day to fewer than ten people on average.
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The conditions of the market and people's fear of holding onto their tokens are the primary reasons for this event taking place. One more factor contributing to a decline in people's willingness to talk to strangers is their mistrust of DeFi and subsequent hacks.
Conclusion
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The total number of unique wallets on Polygon and Ethereum were similar to each other. But Polygon has more than 60-70% of total Liquidity providers.
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As a direct result of the way the market is currently functioning, we have seen a dramatic reduction in the total number of both Yield Farmers and Liquidity Providers in the market.
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According to the findings that were presented earlier, the vast majority of the entities that provide cryptocurrency liquidity end up incurring financial losses. It would appear that a relatively small number of wallets, most likely those belonging to whales who control the markets, are responsible for the vast majority of the profits that are made.
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Over the past year and 6 month, more than 70%, and 80% of LPers loss their assets.
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Both Liquidity Provisioning and Farming have seen activity declines in the past year and a half.
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High market volatility caused liquidity providers to be unable to meet demand in 2022, but not 2021, according to the charts.
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When prices are too volatile, cryptocurrency users, especially those using the Defi protocol, withdraw their funds.
About:
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Author: HaM☰d
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Discord: 0xHaM☰d#8391
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Twitter: @arjmandi_hamed
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Email: h_arjmandi2012@yahoo.com
Q109. Liquidity providers stats
1. Evaluate the distribution of various target segments who provide liquidity (LP):
> * What’s the total no. of unique LP providers? > > > * What’s the ratio between Yield farmers vs. LP Providers? > * What’s the average no. of LP positions opened by each unique wallet address > * What’s the ratio of liquidity (Based on TVL) owned by the Protocol vs. Retail LP in both LP Pool and yield farms > * The percentage (%) increase/decrease of LP Providers in Sushi over the last 1 year
2. Evaluate the profitability of an LP Provider & Yield Farmer
> * Evaluate if there’s a correlation between profitability vs. length of time? > * Evaluate if there is a correlation between profit vs. time of withdrawal > * Correlation between profitability vs type of pool? EX: stable pool
Hey there 👋!
Firstly, I appreciate you sticking with it until the conclusion.
I’m Hamed, Ph.D. In Civil Engineering and interested in data science.
I've made many similar dashboards and visualizations since I started at Flipside in January.
Please have a look at my various contact information and let me know what you think.
What’s the ratio between Yield farmers vs. LP Providers?
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There are only 0.12 yield farmers for every LP provider, which is an extremely low ratio.
On June 26, 2021, this ratio reached an all-time high of 0.58, and on October 24th, it reached a value of 1.3 for Polygon.
This ratio has, for the most part, ranged between 0.2 and 0.4.
Since January of 2022 up until June of that year, the number of LP Providers and Yield Farmers has been on the decline. This can be seen by the fact that in June, it rose to 0.58 on ETH and 0.92 on Polygon.
What’s the ratio of liquidity (Based on TVL) owned by the Protocol vs. Retail LP in both LP Pool and yield farms
Liquidity Provided by Retailers are the most significantly more than Protocol provider, so that less than 0.1% of liquidity are provided by protocols, that it is same in yield farming state.
Findings:
Over the course of the past year and a half, both Liquidity Provisioning and Farming have experienced significant drops in activity.
The charts that have been presented thus far make it abundantly clear that high market volatility was the cause of the liquidity providers' inability to satisfy demand in 2022, as opposed to 2021.
When prices become too volatile, members of the cryptocurrency community, particularly those using the Defi protocol, have been observed withdrawing their funds from the market.
What’s the average no. of LP positions opened by each unique wallet address
In the past year, Unique wallets have opened an average of 2.2 LPs worth of liquidity, and in the past six months, that number has increased to 4.2 LPs. It seems that the most common number of positions opened by users is 1. Second, a sizable subset of users created vacancies in the range of two to three places. The figures from the past year and the past half year are quite comparable.
Is there a correlation between profit vs. time of withdrawal?
Because of the market volatile, the vast majority of users have seen a decrease in the total amount of money that they had invested in USD. This is something that has happened because of the bear market. primarily as a result of a sizable drop in value across the board for the vast majority of coins and tokens. In more recent times, there has been a reduction in the number of users who have experienced a loss; however, this is due to the fact that there has been an overall reduction in the number of LPs.