Try Quests to earn cryptoPool of The Week
✏️ Introduction
Osmosis:
**Osmosis **is an automated market maker (AMM) protocol that allows developers to create bespoke AMMs with sovereign liquidity pools. Osmosis, built with the Cosmos SDK, uses Inter-Blockchain Communication (IBC) to facilitate cross-chain transactions. In other words, Osmosis is a decentralized exchange designed particularly for Cosmos, to spread to other blockchains in the future. → Source
Liquidity Pool:
A liquidity pool is a digital pile of cryptocurrency locked in a smart contract. This results in creating liquidity for faster transactions.
A major component of a liquidity pool are AMMs. An AMM is a protocol that uses liquidity pools to allow digital assets to be traded automated rather than through a traditional market of buyers and sellers.
In other words, users of an AMM platform supply liquidity pools with tokens, and the price of the tokens in the pool is determined by a mathematical formula of the AMM itself.→Source
📌 Methodology
Recently, Osmosis introduced a program named Pool of The Week, highlighting important or new liquidity pools for users. So far, the following four pools have been highlighted on the given dates:
- 11/==11==/22 → Pool ==833== - stOSMO / OSMO
- 11/==15==/22 → Pool ==837== - IST / OSMO
- 11/==22==/22 → Pool ==840== - BNB / OSMO
- 11/==29==/22 → Pool ==634== - wETH.grv / OSMO
This dashboard reviews the volume of liquidity actions on these pools. The period is one week before the date Osmosis highlights them until now, and the impact of this announcement is investigated.
Flipside provides the data used in this dashboard. The essential table we use is Table osmosis.core.fact_liquidity_provider_actions. Using this table and the Pool ID, you can get the data related to each liquidity pool on the Osmosis.
Two parameters have been specified at the top of this dashboard, the Pool_id parameter is related to the ID of the investigated pool, and the P_date is the date Osmosis highlighted it. Note that the selected ID and the P_date must be matched as follows:
- P_date = ==11== <—> Pool_id = ==833==
- P_date = ==15== <—> Pool_id = ==837==
- P_date = ==22== <—> Pool_id = ==840==
- P_date = ==29== <—> Pool_id = ==634==
🔍 Analysis
> To see the ==number of liquidity actions==, ==number of users==, ==volume of liquidity==, ==average volume of liquidity==, and ==distribution of the number of adding or removing liquidity== for each pool, use the Pool_id and P_date parameters according to what is explained in the methodology section.
💡Conclusion
According to the above results observed for all four pools, highlighting the liquidity pools by Osmosis did not have much positive effect on the added liquidity volume, the number of users, and the number of transactions. Of course, in the mentioned time frame, the events related to the collapse of the FTX exchange were so severe that it can be said that the negative impact of that collapse was very high, and highlighting the pools by Osmosis was an attempt to reduce the adverse effects on the liquidity pools.
