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Introduction
DEX
DEXs are decentralized crypto exchanges that offer access to digital assets without an intermediary. Instead of relying on a company to fill and record crypto trades, DEXs offer peer-to-peer (P2P) token swaps using blockchain technology. More specifically, DEXs use smart contracts to execute trades. Smart contracts automatically run orders once various predetermined features are met.
Since there aren't centralized authorities monitoring trades or supplying crypto, DEXs rely on average crypto investors to provide token liquidity. On most DEXs, anyone can put their crypto into liquidity pools, which provide the DEX with trading pairs. To incentivize more users to add their crypto to liquidity pools, DEXs usually offer a percentage of trading fees, providing a way for people to earn yield on their money that wasn’t previously possible.
Osmosis (OSMO)
Osmosis is a cross-chain automated market maker (AMM) protocol built using the Cosmos SDK that allows developers to design, build and deploy their own customized AMMs.
Question
Methodology
This dashboard shows the activity of different LP deposit types in all the pools on Osmosis. On Osmosis users con deposit Liqudit with both assets in the pool or just one. We are looking to see how Osmosis users prefer to provide liquidity. The data for this dashboard comes from the osmosis.core tables of the Flipside database.
Osmosis LP Events And Volume by Event Type
Observations
- In terms of volume, the LP deposit volume of the activity was at its peak in Q4 2021.
- The users that deposit both assets deposit much larger volumes than 1 sided depositors.
- Currently most days there are more Single-sided Lp events than both asset Lp events.
- Users ent pools with osmo or non-osmos assets at similar frequencies and volume.
Osmosis Pool look up LP activity
Observations
- The graphs on the left show the daily number of user depositing and withdrawing liquidity from the selected pool
- The graphs in the middle show the pool daily size USD and the pool token daily price
- The graphs on the right show the deposit, withdraw, and net deposit volumes of the pool over time
Osmosis Pool look up LP activity by event type
Observations
- Newer liquidity pools have higher single-sided Liquidity than older pools
- Most pools have 2 assets deposits making up most of the LP events
- Almost all of the pools that were active in April 2022 lost a large proportion of liquidity in early May during the terra crash
- The Axelar assets the majority have a higher proportion of single-sided osmo LP activity compared to other assets.
Conclusion
The single-sided LP deposit type has become very popular on osmosis, but when users are depositing a large volume into pools they LP with both assets. This is most likely due to the fact that on large LP events single-sided Deposits could have detrimental slippage. The newer pools launched on osmosis have a higher proportion of single-sided liquid to 2 sided LP events. The Axelar assets the majority have a higher proportion of single-sided Osmo LP activity compared to other assets.