axlUSDC: Soon to be forgotten?
Recently, Circle announced the implementation of an IBC-native USDC, inserting itself into an ecosystem where axlUSDC currently dominates. Let's look at how pervasive axlUSDC is within IBC.
Axelar & Satellite Brige
Axelar is a permisionless network and gateway that enables users to build secure cross-chain applications. Satellite is a web app built on top of the Axelar network. Use it to transfer assets from one chain to another.
How Axelar Processes Cross-Chain Transfers
It should be noted, that when Axelar is used to execute cross-chain transfers, the assets are transferred from the source chain through a gateway smart contract, which is monitored by a decentralized group of validators. When a transaction occurs, the validators monitoring the gateway execute a read request to the gateway.
Then the validators use a multi-party consensus protocol to agree upon the state of the transfer. Upon agreement, the validators then execute a write request to the gateway contract for the destination chain that the funds are being transferred to. Again, multi-party consensus takes place, and upon completion, the funds are transferred to the destination address provided by the user(source).
![db_img](https://uploads.flipsidecrypto.com/product/images/vG-yj1DsDhGR.png)
Image Credit : Axelar Blog on Medium
Work Description
In this dashboard we want to :
> Track Satellite bridge activity strictly related to axlUSDC transfer. Which app-chains have the most/least flows of axlUSDC? Looking at Osmosis specifically, analyze how dominant axlUSDC has become compared to both ATOM and other USDC assets in trading and pools.
In this dashboard, based on the data from the token transfer table in the Axelar dataset, as well as the data from the transfer of tokens to the Axelar gateway on the Polygon, Ethereum, Avalanche, and Binance networks, we will examine the current status of the axlUSDC token and the USDC-related tokens in the Axelar ecosystem.
In the next step, focusing on the OSMOSIS ecosystem, we examined all the liquidity pools based on USDC, as well as DAI, UST, and FRAX, in addition to ATOM, from different aspects to see what the current status of USDC/Stablecoin related tokens in this ecosystem is. And find an answer for this question: which stablecoin is the most popular?
#1 - Analysis of axlUSDC Flow on Axelar Network
In the first part of this analysis, we will examine the Inflow/Outflow of axlUSDC in the Axelar network to determine if the movement of this token has changed (decreased or increased) in recent months.
About Me
Mojtaba Banaie
Email : mojtaba.banaie@gmail.com
Twitter: smbanaie
Discord : smbanaie#5528
Date of Analysis : 2022-11-05
Takeaways
> All statistical data shows the absolute popularity and dominance of axlUSDC in Axelar network in the field of Steelcoins. Therefore, we still have a long way to go before we replace axlUSDC with the IBC Native USDC token.
Observations #1 - axlUSDC on Axelar
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The first point that can be seen from the above graphs is that the Inflow amount of axlUSDC is higher (about double) than the Outflows from axelar.
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About 40% of axlUSDC's incoming tokens come from Ethereum (about $110 million) and 30% from OSMOSIS (about $80 million). Polygon is third with about 6%. Kujira and Terra occupy the next places with about 5% each one.
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axlUSDC Inflows of all networks in the third week of October and with the increase in the price of Ethereum after several months, shows tremendous growth.
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About 75% of axlUSDC was sent into Ethereum network ($90 million), 13% to Polygon ($15 million) and 7% to Avalanche. That is, in the subject of axlUSDC Outflow from the Axelar network, EVM blockchains have the largest share (over 95%) in the last three months.
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The Outflow of axlUSDC from Axelar also peaked in the third week of October, but its amount is much lower than the amount of Inflow axlUSDC.
Definitions, References, Assumptions & Limitations
- Since the transfer data in the Axelar dataset did not include the data from the EVM blockchains, we had to obtain the smart contracts related to the transfer of tokens from these networks to Axelar using the official documentation of Axelar and track these transfers directly from the Ethereum, Polygon, Binance, and Avalanche datasets.*
- In the area of EVM-based blockchains, Axelar has made it possible to transfer tokens from the Fantom and Moonbeam blockchains to Axelar and vice versa, but these two blockchains are not currently available in the FlipSideCrypto data. Therefore, these blockchains were excluded from the analysis, which will not cause any problems in the overall analysis.
- All the analysis of this dashboard has been done for the last three months, and the data is updated automatically every day (thanks to FlipSideCrypto).
References :
Which app-chains have the most/least flows of axlUSDC?
To answer which programs had the most axlUSDC Inflow/Outflow in AXELAR, unfortunately the available data is not labeled and the data itself does not contain information about these programs, so we could only calculate the percentage of participation of each blockchain in the flow of axlUSDC to/from Axelar.
The percentage participation of each blockchain in the axlUSDC flow is shown in details in the two tables below.
Observations #2 : USDC Pools on Osmosis
- The two liquidity pools ATOM-OSMO and axlUSDC-OSMO had almost the same swap volume (about one million exchanges) in the last three months.
- Among the stablecoins, axlUSDC-OSMO liquidity pool has won the first place with a huge difference compared to other stablecoins (ten times difference).
- The number of swappers in the two main pools studied, namely ATOM-OSMO and axlUSDC-OSMO, showed a sharp increase in the first three weeks of October, which decreased again slightly in early November.
- The number of ATOM-OSMO swappers is almost double that of axlUSDC-OSMO, but the number of swaps in these two pools is almost the same. That is, users of the axlUSDC-OSMO pool tend to do more swaps (about double) than users of the ATOM-OSMO pool.
- Among the stablecoins, most of the liquidity inflows and outflows from the liquidity pools are precisely with the axlUSDC-OSMO pool, which shows the great popularity of this token pair and axlUSDC in particular.
- The balance of the incoming and outgoing volume of the stablecoin liquidity pools, especially the axlUSDC-OSMO pool, was positive in the last three months, which means that more liquidity was added to these pools, especially axlUSDC-OSMO.
USDC Pools on OSMOSIS - Last 3 Months
In the second step, we will examine the OSMOSIS liquidity pools focused on the USDC token and other stablecoins, as well as the ATOM token (as the main COSMOS cryptocurrency), to see how axlUSDC's performed in the recent months.
Did it keep its position or was it transferred to another token?