Try Quests to earn cryptoThe Red Planet - Analysis of Mars
Q174. Define and assess two key metrics for the performance of Mars Protocol since launch. How is Mars doing, according to these metrics? Some example key metrics include: the number of depositors and borrowers, net LUNA and UST deposited and borrowed, and leverage farming strategies.
Mars has only launched around a month ago, but the excitement of the new protocol has not left the users. In this analysis, I will investigate different metrics over the period of last month. Firstly, I will analyse metrics that include the amount of UST deposited/withdrawn, the amount of Luna deposited/withdrawn. I then look at different ratios, such as the ratio of the UST or Luna repaid vs. borrowed or the ratio of UST or Luna deposited vs. withdrawn. Lastly, I investigate how the total inflows and the total outflows based on transaction counts have varied throughout the past month, and whether there is any correlation between them.
From the above two graphs, we can see that the amount of UST deposited since the launch of Mars has decreased since the beginning of the protocol. The major spike for UST occurred on the 14th of March 2022, followed by a major spike of Luna deposited on the 19th of March. The good aspect that we can see from these graphs is that people are not withdrawing their money from the protocol, which is most likely caused by them staking their assets and being long-term investors.
The two graphs show that people use Mars to borrow large quantities of UST. On the 19th of March, almost 27 million UST has been borrowed. So far, not a significant amount of that has been repaid, which is most likely due to the fact that the borrowing APY is sustainably low, meaning that users don't have to repay their assents immediately. From the second graph, we can see that more Luna has been repaid compared to the amount of UST repaid. We can also see that the amount of Luna borrowed has significantly decreased since the middle of the month of March 2022.
This matric Deposit divided by Withdraw allows for analysing of how much difference there is between people depositing and withdrawing their assets. UST has been deposited a lot more at the beginning of the month of March 2022 compared to it being withdrawn, while Luna has been mostly deposited towards the middle of the month. This is most likely caused by Mars launching their Fields, for example, the LUNA vs. UST farm, which has been popular amongst users, as it also allows for leveraged positions which are very popular amongst users. Lastly, we can see from both graphs that other than a few major spikes, the ratio stays close to 0-10 on most days, meaning that there is not a huge difference in the amounts that are deposited or withdrawn on a daily basis.
Similarly to the previous section, this matric allows to see the difference between how much has been repaid to the protocol compared to the amount borrowed. We can see that for both assets, users are borrowing more than they are repaying.
This section is concerned with the number of transactions made during the past month.
Here we can see the number of daily transactions together with the cumulative user count. What this graph allows us to see is the fact that there has been a steady increase in daily users since the beginning of the Mars protocol. What this also means is that users like the new farming strategies (Fields of Mars) and believe in the success of the protocol. One way to increase the growth of the daily user count, i.e. to make it as rapid as right after the launch of the protocol would be to bring in more pairs of assets for the different leveraged strategies within the Terra ecosystem.
We can see here that the most popular inflow is in the form of deposits rather than in the form of repaying users' loans. As for the outflows, the withdrawn count has stayed pretty much steady throughout the month. In contrast, the number of borrows has spiked in the beginning of the month (8-9th March 2022) which strongly correlates with the amount of money deposited during these dates. What this shows is that people deposit their UST or LUNA as collateral and borrow assets to then use them somewhere else, possibly in different protocols where staking results in higher rewards compared to what they have to pay for borrowing their loans.
Mars is still within its first weeks, there is a lot of potential within the protocol. Even though it is still early days, we can see that people believe in the farming strategies and that they are using Mars on daily basis - as the user count has been not fluctuating as much throughout the month. We can also conclude that users are definitely borrowing the assets from Mars, but are more likely to deposit them somewhere else after - as the current APY available on Mars might not seem as plausible to users compared to other protocols. Finally, new collateral assets and more variety in the Fields of Mars strategies would definitely bring more users to the protocol. The potential of Mars is huge and this analysis has shown that people also believe in it as much as I do.