FLOW's Path To Decentralization

Flow

📝 Introduction

Flow is becoming more permissionless! Flow’s long-term vision is to optimize for security and scalability and move toward decentralization over time.

Staking as the main idea of the Proof of Stake (PoS) consensus mechanism reduces energy consumption and increases the participation of a wide range of users with any level of assets in the blockchain, which strengthens decentralization.

In the following, some of the most important concepts in this field are introduced.

🟢 Staking

Staking is a cheaper alternative to mining. Staking means holding assets in a cryptocurrency wallet, to ensure the security and functionality of the blockchain. In other words, staking is locking currencies in order to receive rewards.

To understand exactly what staking means, you must first understand the Proof of Stake (POS) consensus algorithm. POS allows the blockchains to operate with much less energy and provide a percentage of decentralization.

The main idea behind POS is that users can lock (stake) their crypto and the protocol randomly chooses which user will approve the next block. Usually, the selection of a users depends on the amount of cryptocurrency they have staked; The more cryptocurrency users stake, the better their chances. In fact, the block producers' odds are based on the amount of assets they have staking.

In this way, determining who will build the next block is no longer about their ability to solve complex problems with high hash power; Rather, it depends on the amount of coins or tokens a user has staked. Some believe that producing blocks through staking will create more scalability for blockchains.

🟢 Validator

A blockchain validator is someone who is responsible for verifying transactions on a blockchain. In proof of stake systems like Flow, validators are given rewards as long as they stake the network’s token and correctly participate in the network. This mechanism helps secure the network by imposing the need to lock up value in the network in order to participate in the consensus decisions.

🟢 Flow

Flow is a fast, decentralized and developer-friendly blockchain, purposely built to support decentralized apps (DApps), games and the digital assets they run on.

✍🏻 Methodology

In this dashboard, the following tables are used to extract data:
- flow.core.ez_staking_actions → This table has been used to extract data related to staking and unstking and withdrawing rewards. → Only successful transactions are considered. → TX_SUCCEEDED='TRUE'
- flow.core.ez_dex_swaps → This table was used to find data related to the swap volume of FLOW tokens.
- flow.core.ez_nft_sales → Using this table, the volume of FLOW tokens exchanged for buying and selling NFTs has been calculated.
- flow.core.fact_prices → At the end of this dashboard, the correlation coefficient between FLOW price and stake volume has been evaluated, so this table was used to extract data related to FLOW price.
Time frame considered in this dashboard → block_timestamp::date>='2022-01-01'
The following codes are used to find the data related to each action:
- action='TokensCommitted' or action='DelegatorTokensCommitted'→'Stake'
- action='DelegatorUnstakedTokensWithdrawn' or action='UnstakedTokensWithdrawn'→'Unstake'
- action='RewardTokensWithdrawn' or action='DelegatorRewardTokensWithdrawn'→'Claim Reward'

📃 Purposes of dashboard

In this dashboard an analysis is built around the state of staking on Flow.== In this dashboard, progress towards decentralization has been shown using the following metrics.

1️⃣ Volume of different actions: stake, unstake, claim reward

2️⃣ Statistical data about volume of different actions: stake, unstake, claim reward

3️⃣ Ratio of tokens staked

🧐 Observations

The largest number of transactions related to each of the actions are:
- Staking → Aug 1, 2022 → 11.8k TXs
- Unstaking → Jan 31, 2022 → 1k TXs
- Claiming Rewards → Aug 11, 2022 → 2.2k TXs
Ignoring sudden jumps in the number of transactions related to staking FLOW by users, it can be concluded that the number of transactions related to staking is increasing day by day. On the other hand, in recent months compared to the beginning of the year, users are less willing to unstake their assets.
The total number of transactions related to each of the actions are:
- Staking → 282.6k TXs
- Unstaking → 70.2k TXs
- Claiming Rewards → 20.8k TXs
Among events such as swapping, staking, and trading NFTs with FLOW currency, the largest number of transactions is related to FLOW staking.

🧐 Observations

The number of stakers has increased by 1.5 times compared to the beginning of the year. 😍
On some days, the number of stakers and unstakers has suddenly increased dramatically. 😵
Since the beginning of 2022, the total number of stakers has been about 3 times the number of unstakers.
The address ==0xebd406b037e56e92== recorded the highest number of stakes. This address has staked 564 FLOWs over 3500 transactions in just 1 validator.
The address ==0x6a7457b796dee457 ==has staked the most amount of FLOW since the beginning of the year. This address has staked more than 37.4M FLOW over 2612 transactions in a validator.
The address ==0x23e75820070355ed ==has selected the highest number of validators for staking. This address has staked over 3.2M FLOW in 45 transactions by choosing 31 validators.
About 56% of users have staked less than 1 FLOW.
25 users have staked more than 1M FLOW in total.
About 13k addresses have staked their assets only once.

🧐 Observations

The largest volume of FLOW tokens was staked on July 26.
On some days, the volume of staked tokens has increased dramatically. Some of these days are: → March 17 & April 1 & May 28
On July 20, the highest amount of FLOW was unstaked.
On November 11, a large amount of FLOW was unstaked.
On July 11, the highest amount of FLOW was claimed by users as a bonus.
The total amount of FLOW that has been staked since the beginning of 2022 has been approximately equivalent to 168.5M $USD. This is while since the beginning of the year, about 156.8M $USD of FLOW currency has been unstaked by users. Likewise, the total number amount of FLOW claimed as rewards by users is equal to 11.2M $USD.

🧐 Observations

Consensus has staked the largest volume of FLOW. This validator has delegated a total of more than 43M FLOW since the beginning of the year during more than 2700 transactions.
In general, the top 5 validators in terms of delegated flow volume are:
- Consensus
- Blocto
- Figment
- Bison trails
- Blockdeamon
The seventh best FLOW validator in terms of volume is Flipside. 🧡

Flipside has delegated more than 3.25M FLOW since the beginning of 2022. Most of the FLOW volume delegated by Flipside is from May 10th (1M FLOW) and August 30th (2.25M FLOW).
The highest number of delegating was recorded by blocto validator. This validator has staked about 33.5M FLOW during 258k transactions.
22.9k stakers have chosen only one validator to stake.
About 33.3% of validators have staked between 100k and 1M FLOW.

💡 Conclusion

In this dashboard, the activity of FLOW network users has been evaluated in terms of staking. Since the proof-of-stake consensus mechanism allows the participation of all users in making decisions, the greater the willingness of network users to stake, the more decentralization increases. The results show that the number of users who stake their FLOW assets is increasing day by day. On the other hand, the desire of users to unstake their assets has also decreased. The volume of transactions related to FLOW staking is far more than the swap volume of FLOW and also more than the volume of NFT trading with FLOW currency. All these data show that the speed of movement of the FLOW network towards decentralization is increasing day by day.

Some other important results are:

✅ Many stakers have staked less than 1 FLOW.

✅ About 13k users have staked their FLOW just once.

✅ Blocto is the best validator in terms of the number of delegating.

✅ Consensus is the best validator in terms of volume of delegating.

✅ The largest number of users have selected only one validator for staking.

✅ Most validators have delegated a volume between 100k and 1M FLOW.

Analyst: Emanoel

***Twitter: ***

Discord: Eman#9698

Special thanks to the Flipsidecrypto 🧡

4️⃣ Transactions count based on different action: stake, unstake, claim reward

5️⃣ Share of each event (stake, swap, nft sales) based on transactions count/number of users/volume

6️⃣ Number of unique users based on actions

7️⃣ Top 10 addresses based on number of staking/ volume of staking/number of validator

8️⃣ validator count based on different actions

9️⃣ Top 10 validators based on volume of delegating/number of delegating

🔟 Volume of delegating on different validators

and other evaluations such as correlation analysis between:

Average Flow price & volume of staking
Average Flow price & volume of unstaking

🧐 Observations

Daily, on average, about 537.9k FLOW is staked by different addresses. The average values of unstaking and claiming reward in the daily time frame are equal to 494.8k FLOW and 35k FLOW, respectively.
In half of the days, more than 276.6k FLOW has been staked in this network.
According to the assumption, if we consider the total of FLOW swapped with FLOW paid for the purchase and sale of NFTs as circulating tokens, then the circulating FLOW tokens since the beginning of the year have been equal to 14M. But, the amount of FLOW staked since the beginning of the year has been around 168.5M.