Terminology

Before we get into crunching numbers lets make sure everyone know what all of this actually means

Deposits? Depositing into what?

A liquidity pool is a vault that holds assets, in most (if not all) cases exactly two assets. Users can deposit the pooled assets into the pool to provide liquidity to it. This liquidity can then be used for a variety of things like for a trading pair or for lending. Liquidity providers will usually earn rewards for the deposited liquidity that is paid from the fees generated by the uses of the pool.

What is wETH, why not just use ETH?

The w in wETH stands for wrapped. You can wrap ETH to wETH and unwrap wETH to get back ETH. While this might sound ridiculous at first it does have a clear purpose: For compliance with the ERC-20 standard. Compliance with the standard automatically enables its use on decentralized platforms using ERC-20 without any additional support being required. This e.g. includes bridges to other chains like Osmosis without any additional support for ETH being required.

ERC-20 Standard

ERC-20 is a standard developed after the release of ETH that defines how tokens are transferred and how to keep a consistent record of those transfers among tokens in the Ethereum Network.

With that out of the way we can dive right in:

Osmosis

Osmosis is a blockchain that is built on the Cosmos SDK. Its main purpose is to operate a decentralized exchange (DEX) that has a considerable amount of trade volume of different IBC capable assets. As cosmos does not direclty support ERC-20 all assets from EVM-Chains will first have to be bridged over to Osmosis. There are 2 bridges providing a bridged variant of wETH:

• Gravity Bridge : gwETH (Launched December 2021)
• Axelar : axlwETH (Launched May 2022)

Findings

• Sushiswap and Uniswap both had an explosive launch
  • Uniswap reaching ~300k wETH, Sushiswap reaching ~100k wETH after 5 weeks
  • Osmosis axlwETH reached ~3400 axlwETH after 5 weeks while gwETH did not even manage to reach 1 gwETH in 5 weeks
  • Thorchain only beats gwETH, reaching ~1350 ETH after 5 weeks

Just 6 weeks after the launch of Uniswap V3 on May 5th 2021, it already reached more wETH liquidity than any of the other exchanges compared here!

=> Clearly this is because liquidity was just being moved over from Uniswap V2

Findings

The launch of Sushiswap on August 28th 2020 caused a lot of excitement and a larger first week spike than any of the other compared exchanges. After cooling down a bit there were a decent amount of deposits during the first half of 2021. Since then liquidity has been steadily declining.

Uniswap

Uniswap is the largest decentralized exchange in crypto as of now. It has been around for many years and went through 3 major revisions till now.

Note

In this graph we will only be looking at the usage of liquidity pools on the ETH mainnet!

Findings

• gwETH was rarely added to liquidity pools
• The launch of axlwETH caused ~3500 axlETH to find its way into Osmosis liquidity pool within a month
• The liquidity growth has stagnated after May 2022

ThorChain

THORChain is a decentralised cross-chain liquidity protocol. It observes incoming user deposits to vaults, executes business logic (swap, add/remove liquidity), and processes outbound transactions. Ethereum is one of the supported chains meaning it supports deposits of native ETH, no wrapping required.

Findings

• Since launch the amount of ThorChain the amount of ETH liquidity has been slowly but steadily growing (Except for times of network downtime)
• Growth has stagnated since May 2022, likely correlated to the bear market

Sushiswap

Sushiswap is a decentralized exchange which has been deployed to ETH, L2 scaling solutions for eth (Polygon, Arbitrum, ...) and other EVM-based chains. Apart from swapping it also offers lending (Kashi) and a launchpad for auctioning new tokens (Miso).

Note

In this graph we will only be looking at the usage of liquidity pools on the ETH mainnet!