Introduction

Squid is a protocol built on top of Axelar that allows for fast and secure cross-chain messaging and swaps. The protocol makes it easy to build legos between chains and allows users to interact with applications more easily. Unlike typical interchain bridges, Squid uses general message passing, which allows for getting value across chains without locking up more assets on a bridge and creating a massive honeypot ripe for hackers. Squid has a smart contract on every EVM chain that Axelar connects to and acts as an agent for the user on other chains, swapping tokens, making deposits, or buying an NFT. Squid uses Uniswap, Curve, and other supported DEXes to swap any token between any chain via Axelar, and every swap is into or out of the bridging token axlUSDC. Squid supports any ERC20 token and currently charges no fees, and the user only pays for gas on the source chain, Axelar's chain, and the destination chain. Squid is built on top of generalised message passing, which allows for composability, unlike nearly all other cross-chain swaps and bridges.

source : Squid Medium Page

Polygon records the highest number of unique squid users, accounting more than half of address on all supported blockchains. Binance and Arbitrum were close both at 2000 unique address, and followed by Ethereum and Avalanche.

During its launch on Nov '22, Avalanche brought n the largest numbe rof address, along side Ethereum and Polygon. Over, time, the number of new address using Squid on each chain, decreases, except Polygon, which shows consistent hike and records the highest new user adoption on March '23.

Polygon singlehandedly brought almost 10k of new address, while other chains brought in about 2K of new address up to this day. From this, we can assume that most Squid users are funding most of their activity from Polygon.

Average transaction per address is reported highest on Avalanche. This may make sense as there are less unique address on that chain, and users that make frequent transaction may affect the weightage of this metric.

The scatter plot shows that 8k address on Polygon only interacted once with squid. So when accounting total unique address of 9609 , this means about 90% of squid users on Polygon only had used Squid once.

On the other hand, Avalanche has the highest Squid transaction count for a single address, with 195 transactions sd the highest ever recorded . Avalanche also has more address that made frequently transactions with Squid.

This means most address on avalanche are loyal squid users compared to other chains.

Overall the average transaction frequency peaked on Dec '22, then has been decreasing ever since, indicating less use of Squid by its users.

Based on Transaction Traffic, it is found that Avalanche and Polygon users emits the most transactions on Squid. However, beginning in Feb '23, the activity on Avalnche drop significantly. There are a lot of factors that may cause this, for example, avalanche users may have found better alternative for sending assets accross chain . Further diagnose is needed to study why this is the case. Meanwhile, Polygon records the highest traffic on March. Not only that, polygon has been consistently reports highest transaction traffic for several months. This may due to there more ubique Squid Users on Polygon than on other chains.

The most popular DEX on source chain side is Quickswap, servicing 7.34 K unique address. Sushiswap Polygon and Quick swap are DEX with highest unique Squid user count, making polygon the highest source chain. WIth the highest unique Users, Polygon also brought in the highest axlUSDC trade volume. Destination chain that receives the most USDC volume are moonbeam and arbitrum.

From the study, it is found that Polygon has brought in the most unique Squid users via Quickswap and Sushiswap. However, about 90% of these address only used Squid once. Compared to Avalanche, which has less users, but have more unique users that made higher interaction with Squid. This suggest Avalanche Squid users are tend to make transaction again with. Despite that , the USDC volume brought in by Polygon is the highest recorded of all chain.