Introduction

As of September 15th, 2022, "The Merge" had been successfully completed by Ethereum. Ethereum's transition to proof-of-stake consensus is now complete, marking the end of support for proof-of-work while simultaneously cutting energy consumption by 99.5% .

However, before it became successful, it introduced uncertainty to DeFi markets, prompting liquidity providers to withdraw their funds from DeFi in an effort to reduce risk. There are those who have reinvested their money after the merger, and those who haven't.

Method

In this dashboard used of ethereum.core.fact_event_logs table to looking at:

• Behavior of Sushi MMs 2 weeks prior to and after the merge.
• How much capital did they withdraw?
• which pools/chains got affected the most?
• Have they redeployed back their capital?
• Can we say anything about their identity (Tokemak, etc)?

I separated the merge event by WHEN block_number < 15537393 THEN 'Before the Merge' ELSE 'After the Merge'.

Analysis

:telescope: Findings:

In the right side charts the daily count of deposit and withdrawn transactions separated by the merge event have been depict.

As can be seen, daily count of withdrawn transactions before the merge that shown in blue color bars, are considerably more than deposit transactions shown by orange bars.

But, after the merge event deposit transactions count (Red bars) passed the withdrawn transactions (Blue bars).

The share of total number of transactions based on action type and the merge period time are shown in the PIE chart.

The share of deposit and withdrawn transactions over the two weeks before the merge was 22.8% and 29.5%, respectively. This percentage was 28.5 & 19.2% two weeks after the merger, representing a 6.2% increase for deposit transactions and a 10% decrease for withdrawn transactions. 

✍🏻 Conclusion

• The share of deposit and withdrawn transactions over the two weeks before the merge was 22.8% and 29.5%, respectively. This percentage was 28.5 & 19.2% two weeks after the merger, representing a 6.2% increase for deposit transactions and a 10% decrease for withdrawn transactions.

• On September 14th, the day before the merge event, the volume of withdrawals reached a peak of $66.33m, which is too high, while the number of deposits only reached $75.7k, which is too low. However, on the day of the merge event just after the merge block number, deposit volume increased to $35.9m while withdrawal volume decreased to $11.22m.

• Prior to the merger, about $40 million was the most money that has been taken out of the USDC-WETH pool.

• In the case of Olympus DAO, a multisig signer withdrew $25.9M before the merge and redeployed $5.6M after the merge.

  Tokemak Contract Deployer withdrew $8.48M from their wallet before the merge, and then redeployed $7.44M.

About:

• 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

Sushi and the Merge

The Ethereum merge brought some uncertainty to DEFI markets. It got many market makers (MM) to remove liquidity from defi to lower their risk. After the merge, some have redeployed the liquidity, and some haven't.

• Analyze the behavior of Sushi MMs 2 weeks prior to and after the merge.
• How much capital did they withdraw?
• which pools/chains got affected the most?
• Have they redeployed back their capital?
• Can we say anything about their identity (Tokemak, etc)?

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.

:telescope: Findings:

The above chart shows the normalized deposit and withdrawal volume after and before the merge event. and in the next side chart, the total count of transactions per each action and the total number of unique users are depicted.

In the right side chart, the net flow of Capital turnover before and after The Merge are depicted in daily, which is a confirmation of the above conclusions.

As can be seen, the net flow considerably increased from $-66.24M in Sep 14th, the day before the merge, to $+22.63M on Sep 15th, the day of the merge event.

:telescope: Findings:

Anything about LPers identity (Tokemak, etc)?

We were able to identify only 17 wallet addresses out of 885 LPs. They include:

In the case of Olympus DAO, a multisig signer withdrew $25.9M before the merge and redeployed $5.6M after the merge.

Tokemak Contract Deployer withdrew $8.48M from their wallet before the merge, and then redeployed $7.44M.

Other Wallets That Have Been identified

LeagueDAO, Fang Gang, and Bitcoin Trade have added three new contract deployer addresses.

There are five different addresses that can be used to deposit beacons.

Two Locations of Bitcoin Donors

To which 2 Sybil delegates respond

Bitcoin and Litecoin exchanges IDEX and Hotbit both have withdrawer wallets.

:telescope: Findings:

• Prior to the merger, about $40 million and roughly 40% of withdrawn volume was the most money that has been taken out of the USDC-WETH pool. This represents about 28.5% of the money that left Sushiswap before the merger.

• AAVE-WETH, WETH-USDT, & SUSHI-WETH were the following top 3 pools most affected by the capital outflow before the merge event.

• In the bar & PIE charts in the right the LPers wallet addresses that have the most withdrawn volume are shown.

• Pre-merger cash withdrawals of $15.11M were made by 0x69...f8e1.

  Before The Merge, the top three LPs accounted for about 47.3% of the liquidity withdrawn.

:telescope: Findings:

Have Before the Merge Withdrawers redeployed back their capital?

• There were 885 liquidity sources who pulled funds before the Merge.

• They have not redeposited their initial capital into Sushiswap in substantial numbers.

• Only 16.4% have made another deposit or withdrawal in the past month.

• About 6.17 percent of users have taken out more money from their Sushi accounts.

• So yet, just 99 limited partners (10.2%) have made a return investment into Sushi.

• The above normalized graph shows that many of the returning LPs have only redeposited a small percentage of the funds they had withdrawn before The Merge.

• As a result, it appears that many LPs are weighing the potential return on their investment before committing to reinvesting in DeFi (at least in Sushiswap).

:telescope: Findings:

The right-hand bar chart displays the dollar volume of deposits and withdrawals in the two weeks immediately following and before the merge event. This graph supports the conclusions given above. This graph shows that on September 14th, the day before the merge event, the volume of withdrawals reached a peak of $66.33m, which is too high, while the number of deposits only reached $75.7k, which is too low. However, on the day of the merge event just after the merge block number, deposit volume increased to $35.9m while withdrawal volume decreased to $11.22m.