Supplementary Information

• Author: NSA2000
• Twitter of the Author: @NSA2000C
• Discord of the Author: NSA2000#5651
• Data from FlipsideCrypto

Introduction

The Cosmos Ecosystem

Osmosis is a decentralized exchange (DEX) and automated market maker (AMM) protocol for the Cosmos ecosystem. To understand the specifics of Osmosis, it’s helpful for you to know the context of the Cosmos ecosystem upon which and for which it is built. Cosmos is an overarching ecosystem of blockchain networks that can connect with one another as part of Cosmos’ mission to build an “internet of blockchains.” Interoperable decentralized applications (dApps) on these various networks communicate with each other and send tokens and data back and forth via Cosmos’ Inter-Blockchain Communication (IBC) Protocol.

The Cosmos Hub is the mainchain that serves as the central ledger and primary blockchain protocol to connect with other blockchains in the Cosmos Network. It is a Proof-of-Stake (PoS) blockchain built by the Ignite team and uses ATOM as the native token for voting, staking, and transactions. Cosmos also provides a software development kit (SDK) to enable projects and teams to build on its network. Now that we have a surface-level understanding of Cosmos and how it operates, we can dive deeper into Osmosis.

The Osmosis AMM

Osmosis is a DEX protocol, which means it uses smart contracts to determine the price of digital assets, to produce liquidity via a peer-to-peer (P2P) methodology, and to exact trades between users. This approach to an exchange platform is known as an AMM — a DEX protocol that prices crypto assets in liquidity pools. Contributing tokens to these pools helps foster decentralized liquidity, which is then used to facilitate trades on the exchange. Participating as a liquidity provider (LP) can earn you both trading fees and newly minted LP tokens as incentives for participation.

The Osmosis AMM is unique in that it affords users the ability to create their own liquidity pools, or to duplicate existing ones with their own unique parameters. Because Osmosis is built on the Cosmos ecosystem, users are able to natively trade assets from more than 47 different chains within Cosmos.

While most AMMs today are fairly efficient at providing liquidity in a decentralized manner, they still operate as service-based products: the platform creates pools that are free to join. In the dynamic landscape of decentralized finance (DeFi), this can arguably compromise the efficiency of the liquidity pools available for use. To help solve these issues, the Osmosis AMM was conceived as a “serviced infrastructure” that provides users the ability to tweak the values of tokens and the supply, therefore lowering the barrier to creating custom-built AMMs.

Two primary concepts that drive the Osmosis protocol are sovereignty and heterogeneity. To that end, Osmosis makes use of self-governing liquidity pools. These liquidity pools that exist in Osmosis are not hard-coded and users can use the native Osmosis token (OSMO) to vote on pool parameters and protocols, provide liquidity, and stake. Essentially, it allows holders of the token to decide the make-up of specific liquidity pools, in addition to playing a central role in wider Osmosis protocol governance.

OSMO Token and Superfluid Staking

OSMO is the native token of the Osmosis network. Primarily, OSMO is used for staking to secure the Osmosis chain. As a PoS token, OSMO is inflationary. Over time, new tokens will be minted and entered into circulation. The maximum number of OSMO tokens has been set at 1 billion. As of May 2022, there are 282 million OSMO in circulation.

A key innovation within the Osmosis protocol structure is superfluid staking, which allows users to both stake tokens while simultaneously using them to provide assets to a liquidity pool. This means Osmosis users are rewarded for helping secure the blockchain while staking, and receive reward fees associated with liquidity pool transactions. The first Osmosis token pool to allow for superfluid staking is the ATOM/OSMO pool, which is the top Osmosis crypto staking pool by volume and includes both OSMO and the Cosmos token ATOM.

Osmosis’ use of superfluid staking is designed to not only increase users' capital but also contribute to the security of other blockchains in the Cosmos ecosystem. Prior to the innovation of superfluid staking, if a user brought their assets to Osmosis to earn block rewards in one of the liquidity pools, the blockchain that provided those assets would not be able to use them to secure the chain. With superfluid staking, users supply the liquidity pool while still staking the underlying asset in the blockchain from which it came. To that end, Osmosis and its OSMO crypto staking feature strengthen the security of all Cosmos blockchains, in addition to providing a core DEX for the Cosmos ecosystem. []

> # Methodology > > # ==The data in this dashboard is obtained from the following tables:== > > * osmosis.core.fact_swaps > * osmosis.core.fact_liquidity_provider_actions actions > * osmosis.core.fact_transfers > * osmosis.core.dim_labels > > # ==Aim of this Analysis:== > > # This dashboard aims to conduct a comprehensive investigation on the DOT/OSMO liquidity pool as well as transfer and swaps behavior of the DOT token. > > # ==Important notes:== > > * ==Cryptocurrency arbitrage== is a strategy in which investors buy a cryptocurrency on one exchange, and then quickly sell it on another exchange for a higher price. Cryptocurrencies trade on hundreds of different exchanges, and often the price of a coin or token may differ on one exchange versus another. > * DOT/OSMO Pool ID: ==773== > * axlDOT Token Address: ==ibc/903A61A498756EA560B85A85132D3AEE21B5DEDD41213725D22ABF276EA6945E== > * axlUSDC Token Address: ==ibc/D189335C6E4A68B513C10AB227BF1C1D38C746766278BA3EEB4FB14124F1D858==

Results and Discussion

> # ==The following charts show the daily variation of the number of transactions and users as well as transactions volume (total, avearage and median) and their distributions.==

> # ==The following charts show the average number of transactions and users as well as transactions volume (average and median) for different periods e.g. daily, weekly, and monthly.==

> # ==The following charts show the daily variation of the number and volume (total and average) transfers as well the cumulative charts thereof.==

> # ==The following charts show the daily variation of the number of the swap transactions and users as well swap transactions volume according to the swap type (‘swap to’ or ‘swap from’).==

> # ==The following charts show the daily variation of the number of the swap transactions and users and swap transactions volume as well as distributions thereof, according to the type of investing (real or arbitrage).==

> # ==The following charts show the most popular swap users according to the transactions number and volume.==

> # ==The following charts show the most popular arbitrageurs according to the transactions number and volume.==

The daily variation of the number of deposit transactions and users shows a significantly decreasing trend since Aug 2022 while this trend is rather constant for withdrawal transactions and users. The daily variation of the transaction volume (total, average, and median) shows rather fluctuating trends with some spikes. It must be pointed out that as far as the total number of transactions and users as well as the transaction volume is concerned, deposit transactions has the upper hand compared to withdrawals.

The number of active users by their transactions number and volume for different periods is as follows:

==Deposit:==

The average number of Users, Monthly: 174, Weekly: 47, Daily: 7.

The average number of Transactions, Monthly: 755, Weekly: 206, Daily: 31.

The average volume of Transactions, Monthly: 114.66K, Weekly: 31.27K, Daily: 4.75K.

==Withdrawals:==

The average number of Users, Monthly: 107, Weekly: 31, Daily: 5.

The average number of Transactions, Monthly: 132, Weekly: 38, Daily: 6.

The average volume of Transactions, Monthly: 43.06K, Weekly: 12.3K, Daily: 1.83K.

It can be concluded that the average number of transactions and users as well as transactions volume (average and median) for different periods e.g. daily, weekly, and monthly shows that deposit transactions are superior to withdrawals transactions. However, as far as the average and median amount of transactions according to their type is concerned, withdrawals (average and median amount of withdrawal transactions is about 327 and 46, respectively) have the upper hand compared to deposits (average and median amount of deposit transactions is about 152 and 7, respectively).

It can be concluded from the above charts that the daily variation of the number of transafers shows a rather constant trend since Jun 2022, and only one spike on 10 Dec (25) can be seen.

The trend of the daily variation of the volume (total and average) transfers is rather increasing with some fluctuations since the second half of Jul 2022.

It is worth mentioning that the total number and volume of transfers is about 896 and 82.K, respectively.

According to these charts, the daily variation of the number and volume of the swap transactions according to the swap type (‘swap to’ or ‘swap from’) show rather fluctuating trends, and as far as the number of transactions is concerned ‘swap to’ transactions has the upper hand while regarding the swap transactions volume, ‘swap from’ transactions are superior. Moreover, a significantly decreasing trend for the ‘swap to’ users can be seen from Jul to Sep 2022, while this trend is rather fluctuating that is overall constant since Sep 2022. As far as the number of ‘swap from’ users is concerned, a rather fluctuating trend (which is almost constant overall) can be observed since Jul 2022.

According to the daily variation of the number of swap transactions and users and swap transactions volume as well as distributions thereof, according to the type of investing (real or arbitrage), it can be said that real swap users are active mostly. Only three (0.145%) arbitrageurs have done 1983 (11.5%) swap transactions by swap volume of about 611.95K (23.5%). It is interesting to note that the average and median amounts of swap transactions that are done by arbitrageurs are higher than the real swap transactions. It is also worth mentioning that arbitrageurs were more active than real users on some days as far as the volume of swap transactions is concerned.

As far as the most popular swap users according to the number of swap transactions is concerned, the following users have the upper hand:

> ## osmo1zrcha59mm34m4a2tngvvzsll7rf00svl0rtyrf(1708, 3.9%) > > ## osmo187r3j5rcu6vwtf7zh9vq3yxt632jmau5zqf0vpo(1700, 33.7%) > > ## smo10g69v2meq377dpzhrx70e28nf8ptc9lfmkd2zk (967, 19.2%) > > ## osmo1hta8fzmjnshc4hh3vv2y2qyewyqus5mt95a087(557, 11.1%)

As far as the most popular swap users according to the volume of swap transactions are concerned, the following users have the upper hand:

> ## osmo10g69v2meq377dpzhrx70e28nf8ptc9lfmkd2zk (661.66K, 48.1%) > > ## osmo187r3j5rcu6vwtf7zh9vq3yxt632jmau5zqf0vpo (339.14K, 24.6%) > > ## osmo19mne9dfnqcax56dtku3eehgk78kwn8pns9e6mh(11.71K, 8.12%) > > ## osmo1hta8fzmjnshc4hh3vv2y2qyewyqus5mt95a087(106.91K, 7.77%)

As far as the most popular swap users according to the average amount of swap transactions are concerned, the following users are the top 3 ones:

> ## osmo14mzawkctka6a7kyn25sf3yk50rga2l7fypcvv0(4.98K, 29.7%) > > ## osmo1t3vzn6fsnr66h773wllgvxal5mhejjcpjetsnr(3.77K, 22.5%) > > ## osmo1ucygnju0uukqt6f4n3eh52tg5qhlfcnx3p7ws8(2.2K, 13.1%)

The 3 arbitrageurs according to the number of swap transactions are as follows:

> ## osmo15vdjje8009ly9rudapxjcht5h9vshc7hw3a7zy(886, 44.7%) > > ## osmo1ych3kkm5cw57w5kml5vvrmzueezvyrlpcfsrhc(719, 36.3%) > > ## osmo1nzmrau4jvcp9ae6f0hktud783wqdfpcualjzy8(378, 19.1%)

The 3 arbitrageurs according to the volume of swap transactions are as follows:

> ## osmo1ych3kkm5cw57w5kml5vvrmzueezvyrlpcfsrhc(447.92K, 73.2%) > > ## osmo15vdjje8009ly9rudapxjcht5h9vshc7hw3a7zy(146.35K, 23.9%) > > ## osmo1nzmrau4jvcp9ae6f0hktud783wqdfpcualjzy8(17.69K, 2.89%)

The 3 arbitrageurs according to the average amount of swap transactions are as follows:

> > ## osmo1ych3kkm5cw57w5kml5vvrmzueezvyrlpcfsrhc(623, 74.6%) > > > > ## osmo15vdjje8009ly9rudapxjcht5h9vshc7hw3a7zy(165, 19.8%) > > > > ## osmo1nzmrau4jvcp9ae6f0hktud783wqdfpcualjzy8(47, 5.63%)

> # Summary > > > # The aim of this dashboard is to comprehensively investigate the DOT/OSMO liquidity pool as well as transfer and swaps behavior of the DOT token. > > > >

> > > > # The daily variation of the number of deposit transactions and users shows a significantly decreasing trend since Aug 2022 while this trend is rather constant for withdrawal transactions and users. > > > >

> > > > # The daily variation of the transaction volume (total, average, and median) shows rather fluctuating trends with some spikes. > > > >

> > > > # It must be pointed out that as far as the total number of transactions and users as well as the transaction volume is concerned, deposit transactions has the upper hand compared to withdrawals. > > > >

> > > > # Taverage number of transactions and users as well as transactions volume (average and median) for different periods e.g. daily, weekly, and monthly shows that deposit transactions are superior to withdrawals transactions. > > > >

> > > > # Regarding the average and median amount of transactions according to their type, withdrawals (average and median amount of withdrawal transactions is about 327 and 46, respectively) have the upper hand compared to deposits (average and median amount of deposit transactions is about 152 and 7, respectively). > > > >

> > > > # The daily variation of the number of transafers shows a rather constant trend since Jun 2022, and only one spike on 10 Dec (25) can be seen. > > > >

> > > > # The trend of the daily variation of the volume (total and average) transfers is rather increasing with some fluctuations since the second half of Jul 2022. > > > >

> > > > # The total number and volume of transfers is about 896 and 82.K, respectively. > > > >

> > > > # The daily variation of the number and volume of the swap transactions according to the swap type (‘swap to’ or ‘swap from’) show rather fluctuating trends, and as far as the number of transactions is concerned ‘swap to’ transactions has the upper hand while regarding the swap transactions volume, ‘swap from’ transactions are superior. > > > >

> > > > # A significantly decreasing trend for the ‘swap to’ users can be seen from Jul to Sep 2022, while this trend is rather fluctuating that is overall constant since Sep 2022. As far as the number of ‘swap from’ users is concerned, a rather fluctuating trend (which is almost constant overall) can be observed since Jul 2022. > > > >

> > > > # The daily variation of the number of swap transactions and users and swap transactions volume, according to the type of investing (real or arbitrage) shows that real swap users are active mostly. > > > >

> > > > # Only three (0.145%) arbitrageurs have done 1983 (11.5%) swap transactions by swap volume of about 611.95K (23.5%). > > > >

> > > > # The average and median amounts of swap transactions that are done by arbitrageurs are higher than the real swap transactions. > > > >

> > > > # The arbitrageurs were more active than real users on some days as far as the volume of swap transactions is concerned. > > > >

> > > > # The 3 arbitrageurs are osmo1ych3kkm5cw57w5kml5vvrmzueezvyrlpcfsrhc, osmo15vdjje8009ly9rudapxjcht5h9vshc7hw3a7zy, and osmo1nzmrau4jvcp9ae6f0hktud783wqdfpcualjzy8. > > > >

> > > > # To draw a conclusion,== It can be said that all the observations and results in this review analysis showed that although deposite transactions (in terms of number of transactions and users as well as transactions volume) have the upper hand, the withdrawal transactions are superior to depoist transactions as far as the average and median amount of transactions is concerned. It was interesting to find that about 11.5% of transaction has been done by a few arbitrageurs (only 3 users), and the rest of swap transactions have been done by real users.