Conclusion

Analyzing the intricate web of interactions and activities surrounding wstETH and the Cosmos ecosystem provides enlightening insights. Here's a distilled summary of our findings: - Demand & Utility: The historical peak of over $650,000 worth of wstETH bridged to Cosmos signifies a tangible demand. Despite subsequent liquidity withdrawals, the fact that a handful of wallets contributed over half of this volume emphasizes a rapid capability for liquidity injection into the Cosmos landscape. - Comparison with Other Tokens: Observing the activity of previously bridged tokens through Axelar on Osmosis offers perspective. For instance, wrapped USDC's dominant presence, marked by a $2 million swap volume from 3.5 thousand users within 30 days, illustrates the potential utility and adoption wstETH might experience. In comparison, both wrapped Bitcoin and Ethereum evidenced lower, but still substantial, activities. - DeFi Engagements: The current involvement of axl wrapped ETH in prominent DeFi protocols, like Mars, indicates a propitious landscape. Given Ethereum's desirability as a collateral or margin within Cosmos DeFi, wstETH, especially in its staked state, has the potential to serve pivotal roles based on user risk appetites. - Predictive Analysis: Using axlWETH's activity as a benchmark, there’s a promising forecast for wstETH's integration into various DeFi protocols on Cosmos. With projections hinting at substantial deposits in key platforms such as Mars, Helix, and Osmosis, there's a rich terrain for wstETH's growth and utility. - Incentivization & Adoption: The historical impact of incentivization, as seen with Ethereum's massive APY offerings on Osmosis, can be a game-changer for wstETH's adoption rate. If similar incentives are presented for wstETH, a sharp uptick in total bridged value can be anticipated. - A Conservative Estimate: Even with a tempered outlook, our calculations suggest that at least 1.77M wstETH will bridge to Cosmos. This figure, derived from cautious assumptions, showcases a baseline expectation and can significantly amplify with strategic DeFi integrations, increased incentives, or a natural drift of users seeking to utilize ETH as a preferable collateral. Though this estimation does fall short of the 3M target, it is crucial to note that our assumptions have been sandbagged or tilted towards the pessimistic side. Therefore, with favorable conditions and strategic initiatives, the realization of the 3M target remains within reach.

Lido on Cosmos