Untitled BoardETHR
Examine user behavior in recent weeks leading up to the merge on at least 3 major protocols. Have there been any changes in the amount of ETH removed from protocols like Uniswap and Aave? Note any trends or outliers you find.
What is ETH Token ?
Ether (ETH) is the native token used by the Ethereum blockchain and network as a payment system for verifying transactions. ERC-20 is the standard for creating smart contract-enabled fungible tokens to be used in the Ethereum ecosystem.
What is The Merge ?
Soon, the current Ethereum Mainnet will merge with the Beacon Chain proof-of-stake system. This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake and sets the stage for future scaling upgrades including sharding. The Merge will reduce Ethereum's energy consumption by ~99.95%. This update is set to be executed on 15th September (based on difficulty and hash rate of Ethereum blockchain).
![db_img](https://uploads.flipsidecrypto.com/product/images/wdGRGIfJTsKZ.webp)
Methodology
In this dashboard, We are going to check ETH removal activity from different protocols such as AAVE, Uniswap, Sushiswap, Compound, MakerDAO, and THORChain and analyze how users are treating their ETH before The Merge.
Moreover, I have set the timespan for this analysis from the past 3 weeks till now.
For swaps, I have filtered results to calculate the number of ETH/WETH (and its derivates such as stETH, frETH, …) swap transactions to other tokens (assets which are not ETH/WETH or its derivates).
Based on the above charts, the number of ETH/WETH (and its derivates such as stETH,frETH, …) swaps have slightly increased during recent days. Also, the overall trend line of number of ETH swappers is positive. Moreover, we can see a high volume of ETH swaps during recent days, especially with the highest swap volume on 13th September (2 days before the estimated Merge date).
Also, on the right chart, we can see ETH (and its derivates) balance of Uniswap pools (which include ETH) is decreasing obviously over time and this means users are withdrawing ETH from these pools and ETH token is getting removed from Uniswap pools.
Also on the Sushiswap, we can see a light increasing trend of ETH removals from pools over time. As we see, the number of users who are swapping their ETH into another tokens is increasing slightly over time comparing to the first days of the chart.
On the volume chart (right) we can see almost a constant trend of ETH removal over time, but highest ETH has been swapped during 7th September (past week) from Sushiswap platform.
According to the above charts, the increasing trend of ETH withdrawal from AAVE protocol is clearly visible. As we see, as it goes on, the more number of ETH withdrawal transaction occurs on AAVE protocol and also the total trend line of withdrawal volume (right chart) is increasing over time.
Also on the above charts on Compound, we can see increasing number of withdrawals and also number of users who are withdrawing their ETH from this protocol over time.
Moreover on the right chart, we can see increasing activity of ETH removal from this protocol especially during the past week.
on MakerDAO, we can also see increasing number of withdrawal transactions and also users who are withdrawing, over time till today and these numbers has even increased during the recent days.
On the volume chart, we can see highest ETH removal from MakerDAO on 26th August and also another high spike on 13th September which shows quite high ETH removal from this protocol.
Also on the above charts, we can see increasing activity of ETH removal from THORChain LPs especially on 14th September with a massive high spike of removing liquidity actions from THORChain LPs.
Moreover based on the right chart, total ETH balance of ETH liquidity pools on THORChain is clearly decreasing over time which indicates the ETH removal activity on this protocol.
According to the above charts, there is high activity of ETH transfers from users wallets to Cenralized Exchanges wallets and its getting increasing over time. This shows maybe users tend to send their ETH to CEX in order to sell them and do not challenge the risk of ETH price volatile during The Merge update timespan.
Moreover, we can also see decreasing ETH balance of CEXs wallets over time based on the right chart.
Uniswap
Sushiswap
AAVE
Compound
MakerDAO
THORChain
Centralized Exchanges
According to the above charts, the number of users, the number of transactions and also the volume of swaps from ETH pools on THORChain has increased over time and we can see higher and higher activity of ETH removal from these pools during the recent days.
Conclusion
According to the above analysis, as we are getting closer to The Ethereum Merge update, there are more acitivity of ETH removal from different certain platforms/protocols.
Moreover, Ethereum was the primary focus of the outflows during recent weeks and this comes despite the improved certainty of the Merge and perhaps highlights a concern amongst investors that the event might not go as planned and also some volatiles on ETH token price during this timespan.
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Some Related Article and Information About ETH Activity During Recent Weeks
The growing number of speculators taking out ETH loans to maximize their potential to earn forked Ether proof-of-work tokens (ETHPoW) has been causing headaches for decentralized finance (DeFi) protocols. For instance, Aave has halted ETH lending until the Merge has gone through, while Compound Finance has opted to cap the number of loans and introduce a “jump” interest rate model. (Source).
Users are certainly positioning themselves to get free tokens, despite numerous stablecoins and projects distancing themselves from a PoW chain.
Delphi Digital’s latest report notes that despite the declining price of ETH of late, exchanges saw outflows totaling 476,000 on Aug. 29.
This marks the third largest amount of ETH withdrawals since March, and the firm attributed this to Merge and investors repositioning to collect ETHPoW tokens. (Source).
Based on Coinshares article, digital asset investment products saw outflows totalling US$63m, the 5th consecutive week of outflows and the Ethereum was the primary focus of the outflows, totaling US$62m last week, this comes despite the improved certainty of the Merge and perhaps highlights a concern amongst investors that the event might not go as planned.
![db_img](https://uploads.flipsidecrypto.com/product/images/H6QXlvUq3jAa.png)