Binance Bonanza
Question:
On October 28th, 2022 Binance became the first CEX to list spot trading for $OSMO. Abruptly, OSMO price shot up around 32%. How did this news impact trading on Osmosis. Analyze OSMO trading activity on October 28th and this past week vs. daily & weekly averages. This analysis should occur against two time periods: the 60-day averages & the 60-days prior to the May Terra collapse. Did any other tokens see a spike in trading on Osmosis?
Further, can you trace OSMO liquidity flowing into Binance in the last few days? Centralized exchange listings of OSMO are permissionless so liquidity on Binance should be funded through purchases on Osmosis.
Note: given this question is being released BEFORE the week of analysis in question please structure your queries accordingly to capture the data that will be populated in the future. Please create dynamically updated queries.
Overview of analysis:
This analysis contains the main 4 parts as below:
- Price analysis and investigation on various time periods
- After listing on Binance
- 60 days before listing on Binance
- Post Terra collapse
- 60 days before Terra collapse
- Analysis on transfer of OSMO
- Trade analysis of OSMO
- Inflow and outflow of liquidity on Binance
About Osmosis and Binance recent decision:
Osmosis is an advanced Automated Marketer Protocol (AMM) that allows developers to build custom AMMs with robust liquidity pools. Osmosis is built using the Cosmos SDK and uses the Inter-Blockchain Communication (IBC) feature to enable cross-chain transactions. The Cosmes ecosystem follows the "Blockchain as Decentralized Program" architecture; This means that Osmosis is a blockchain connected to Cosmes Hub, which is also a decentralized exchange.
Osmosis, with the help of IBC, connects to the entire ecosystem of Cosmos chains and their more than 10 billion dollars of native assets. After supporting active blockchains on the Cosmos hub, the project aims to connect to other chains such as Ethereum and Bitcoin.
Osmosis allows users to create liquidity pools with unique parameters. For example, as you know, two tokens with an equal ratio should be added in normal liquidity pools; But in this project, pools with multiple ratios can be created. Osmosis rewards structure is also compatible with these capabilities.
How does it works?
The incentives of most active projects in Cosmes are focused on Validators and Delegators; But Ezmosis is trying to provide the interests of all participants in the network and those who make deposits. The nodes that have staked the most amount of Osmosis network token are selected as validators and at the time of writing this article there are 118 active validators.
Often in many financial instruments, to provide an efficient and accessible automated market maker, all we need is to adjust the price function and a few other limited parameters. In automated market makers, you either have to use an existing connection curve that may not be optimal, or you are burdened with the heavy task of building your optimal custom pool. Osmosis lowers the barriers to creating an optimal pool by providing the pool creator with the ability to simply adjust the connection curve and reuse most of the key AMM infrastructure.
Methodology:
The data provided by Flipside has been used to handle this analysis.
This dashboard divided into the three major sections as below:
- price analysis→ including price of OSMO and ATOM tokens since October 1st
- Transfer and trade analysis on various time periods→
- Average transfer/trade volume per day → compare with October 28
- Average transfer/trade volume per week → compare with dates around listing on Binance
- Transfer/Trade analysis of OSMO token over time
- Track liquidity on Binance→
- Number of liquidity transactions, Number of liquidity providers and Volume of liquidity inflow and outflow from Binance accounts
This dashboard is considered as live dashboard and updated in daily basis.
Part 1: Price analysis and investigation on various periods
Findings:
- First of all lets look at the price of OSMO and ATOM token since October 1st. As can be seen, after listing OSMO token on Binance, the price of both tokens increased considerably. Specially for OSMO token the gradient of price chart is sharper.
- The stats for various time periods reveals the domination of transferring OSMO token by number of transfers for pre Terra collapse.
- But as can be seen after listing OSMO on Binance, the average transfer volume of OSMO per day increased dramatically.
- Also, the average transfer volume per week for various time periods demonstrated the priority of post listing on Binance time frame.
By the use of these average numbers, the real comparison between transfer volume on October 28 and past week before listing on Binance have been determined.
Part 2: Transfer analysis of OSMO token
Findings:
- The transfer volume of OSMO on October 28 has been compared to the average transfer volume per day of various time periods and according to this chart, the transfer volume of OSMO on October 28 has been passed the average daily transfer volume before Terra collapse.
- Also, daily analysis and comparison with average weekly transfer volume shown the spike of transfer volume of OSMO on October 28 and on that date, it passed the weekly average transfer volume.
- The cumulative analysis and gradient of its chart shown the impact of each time period on transfer volume of OSMO token.
Part 3: Trading analysis of OSMO token
Findings:
Lets look precisely on trade of OSMO on October 28 and around that date:
- The trade volume of OSMO on October 28 increased but still lower than daily average transfer volume on pre Terra collapse.
- Also, the swap to OSMO volume increased just after listing OSMO on Binance on October 28, considerably.
- It can be said that, after lisitng OSMO on Binance users swapped their assets to OSMO token and expect price increment.
Part 4: OSMO liquidity flowing into Binance
Findings:
Now keep eyes on liquidity flow on Binance:
- The transactions related to the adding liquidity to OSMO pool on Binance is more than outflow transactions.
- Over 21 million USD have been added as liquidity on Binance OSMO pool after listing it.
- The highest volume of inflow happened on the October 28 and the highest outflow happened on October 29 with 5.53 million USD so far.
Final words:
- The listing of OSMO token for trading on Binance has huge impact on transfer and swap volume of OSMO token.
- The price of OSMO increased after listing OSMO on Binance for trading.
- After Terra collapse, this event is one of the most impactful event on Osmosis network and OSMO token.
Findings:
The average trade volume of OSMO per day and week for various time periods have been shown in this part.
- Before Terra collapse, the average swap volume of OSMO per day and week in more than other time frames.
- Also, the average swap volume of OSMO for both swap types (Swap from and swap to) increased after listing OSMO on Binance.
Findings:
The trade activity of OSMO token since first week of March 2022 determined in this part:
- As can be seen and expected, the highest swap volume of OSMO token happened around Terra collapse and people swapped their OSMO to avoid financial loss.
- The next considerable spike on swap volume of OSMO happened on the week around October 28 (date of listing OSMO on Binance) and many of users swapped their assets to OSMO token to seek profit.
- The average swap volume for both swap types validate the above statement about special dates and spikes.
- In general, the trend of trade for OSMO token decreased over time after Terra collapse but after Binance decision on Listing OSMO token the swap volume to OSMO increased.