Try Quests to earn cryptoOptimistic Bears (Redux)
Project : Optimism
Bounty Name : Optimistic Bears (Redux)
Question: Analyze Optimism during the recent bear as markets were turbulent, showing whatever metrics you care to unearth.
You can choose any topic you’d like: How did the network perform? What about market performance? Were there significant inflows or outflows on bridges? Were there any notable patterns in user behavior?
Date of analysis : 2022-11-09
Optimism
Ethereum is plagued with criticisms of its less than optimal scaling capabilities and high gas prices. There have been talks about increasing the scaling capacity of the Ethereum mainnet for a while now.
However, the Ethereum ecosystem needs a solution for scaling right now, and if Ethereum is not able to give these new applications a platform with enough scaling capabilities, they can seek alternatives like the BNB Chain or Cardano. Optimism rollout was created to solve exactly the scalability problem of Ethereum.
Optimism Rollup network is one of the several solutions trying to address Ethereum’s congestion problem. The Ethereum network is often congested to the almost maximum capacity, and until upgrades to the main blockchain are made, scaling solutions like Optimism allow Ethereum’s transactional abilities to remain usable without shelling out a fortune on gas fees.
In short, Optimism uses advanced data compression techniques to speed up and cut the costs of Ethereum transactions. They do so by a technique known as called Optimistic Rollups, where multiple transactions are “rolled up” into one transaction and settled on another cheaper blockchain. The verified transactions are then fed back to the main Ethereum blockchain. The biggest advantage of Optimistic Rollups is the fact that they do not compute by default, which theoretically leads to scalability gains. Estimates say Optimistic Rollups can offer 10-100x improvements to scalability. On the downside, however, is the existence of a “challenge period,” which is a time window in which anyone can challenge assertion and increase withdrawal time. source
Methods
Tables I use: I use optimism.core.fact_hourly_token_prices for OP price and use ethereum.core.fact_hourly_token_prices for ETH and BTC Price. I use optimism.core.fact_transactions for transactions of Optimism and i use optimism.core.fact_blocks for optimism blocks. I use optimism.core.ez_nft_sales for NFT market on optimism . I use optimism.core.fact_event_logs for transactions and filter transactions with label_type = 'dex' because i want dex transactions. I use ethereum.core.ez_eth_transfers and ethereum.core.ez_token_transfers for bridges from ethereum.
OP Contract: 0x4200000000000000000000000000000000000042
WBTC Contract: 0x2260fac5e5542a773aa44fbcfedf7c193bc2c599
Address :
Ethereum→ Optimism: '0x99c9fc46f92e8a1c0dec1b1747d010903e884be1'
Optimism→ Ethereum: '0x25ace71c97b33cc4729cf772ae268934f7ab5fa1'
Metrics
Price fluctuations
Optimism Network
NFT Market
DEX Activity
Bridge Status
Activity in Platforms
Even if you have very little familiarity with the cryptocurrency market, you definitely know that this market is very volatile and this fluctuation is for all the currencies in this market, and many of them are affected by each other, that is, when one of them falls. may cause the price of other currencies to fall.
Here you can see the price chart of two very popular currencies that have a great impact on the cryptocurrency market, and if you look carefully, you will notice that these two currencies always rise and fall with each other, that is, when the price of one of them decreases The price will also decrease and this price decrease will affect the entire cryptocurrency market.
From the beginning of August, the price of ETH and BTC began to decrease, and this price decrease also affected the price of OP and caused the price of this token to decrease, and we saw the price of these currencies decrease from the beginning of August to the end of October. And after that, their price increased a little. Now let's see how this long-term bearish market has affected the Optimism network.
Price fluctuations
Optimism Network
Optimism is one of the most powerful layer 2, which is a very popular network among users, and this network gave its native token as an airdrop to its active users a few months ago, and as you have seen, the cryptocurrency market has been in a downward trend for the past few months. Now let's see if this decline has increased the activity in the Optimism network and which activities have increased.
The total number of Optimism network transactions in this bearish market is in an upward trend, and this shows that this price reduction has increased the activity in the Optimism network, so that in early August, the number of network transactions was around 100,000 per day, but in In the last few days, the number of transactions has reached 330 thousand. The number of Optimism transactions at the beginning of this downtrend was 1.5 transactions per second, which has reached 3 transactions per second in the last few days, which indicates that the activities in this network have increased a lot.
A very important point is that even though the activities in this network increase has had a lot, but the failed transactions did not increase at all, and this shows that the Optimism network is very stable, and as the network became crowded, the transactions did not fail at all, and even if you look at the graph below, you can see that in early August, nearly 9% of transactions used to fail, but now 5% of transactions fail, and this shows that with the increase in activities in this network, we did not see any network failures and transaction failures, and this is a very good point for this network, and this shows that users really have the right to like the powerful Optimism network.
Naturally, every network needs a proper and strong infrastructure to carry out transactions properly, and for such an infrastructure, it must be paid for, and when a user makes a transaction in a network, he must pay a little to be able to have a healthy network, and it is natural that When the number of transactions increases, the amount of fee spent also increases, and as you can see, in this bearish market, when the number of transactions increased, the amount of fee spent also increased, but this increase in fee was not so high as to discourage users.
When the activities increase in a large network like Optimism, naturally the number of active users of the network should also increase because these are the users who make transactions in the network and as you have seen in the last few months, the activities in this network have increased and the number of active users This network has also increased so that at the beginning of this downward market, i.e. the beginning of August, the number of daily active users was 12,000, but in the last few days, this amount has reached 34,000 daily active users, which is a very good growth for this network. But there is a negative point, and that is that the process of attracting new users for the Optimism network has not been upward at all, and this means that this network has not performed well at all in attracting new users.
NFT Market
The NFT market is one of the most attractive markets to make a profit in the dull days of the down market of cryptocurrencies, and now let's see how the NFT market has been in the Optimism network in this down market that has been going on for several months and whether Has this market been able to activate the users of this network?
After the beginning of the down market, we did not see an increase in activity in the NFT market until the end of September, or rather, from September 20, the activities in this market increased very suddenly and the number of NFT sellers increased from 350 to 3,700 sellers.
Because the acceptance of this market by users increased greatly, the average price of NFTs reached from around 10 dollars to 300 dollars, and this shows that users spent a lot for these NFTs, and in the same days that the number of their sales increased. The amount of fees received by the platforms also increased because users have to pay a fee for the platform for every NFT they buy, and this means that this increase in activity is very good for the platforms, and this means that the platforms When they see such a situation, they think of creating a marketplace in the Optimism network, and this means that this network is progressing.
The point that exists is that after this sudden increase in NFT market activities, the number of sales is in a downward trend, and this means that this market has not been able to attract its users in the long term, because as you can see, the number of sales Decreased users of this market and this means NFTs should have an attractive idea for users again.
DEXs Activity
DEXs are one of the most attractive platforms of any network because it is possible to make a profit in DEXs with price fluctuations in the way that you buy an asset at a low price and when its price increases, you can swap it for assets. Earn more profit and this makes DEXs very attractive for users.
From the beginning of August, when the market began to decline, and even before that, the number of DEX swaps was in a downward trend, and this trend continued until around September 20, but after that, the activities in the DEX increased a lot, and exactly in this For days, the cryptocurrency market grew a little, and this growth caused a huge increase in the activity of users in DEXs
Bridges Status
The ethereum network is a very powerful network that has very loyal users and fans who are very interested in working in this network, but the most important thing is that this network has become very crowded and the number of users of this network has increased a lot. The reason for the transactions on this network has also increased and as a result the transactions have also increased and the users of this network decided to migrate from this network and one of the best networks for their migration is Optimism and now let's see in this market How much migration has taken place in this network?
At the beginning of this bearish market, we can see that the trend of bridges was downward, and the users were not eager to bridge their assets to optimism at the beginning of this bearish market, and this trend continued until the middle of October, but from October 10, the conditions changed and the number Bridges increased a lot and over 90% of the bridges were from Ethereum to Optimism and only 10% of them were from Optimism to Ethereum, but the volume of bridges from Optimism to Ethereum is not proportional to the number of bridges and this shows Grants, the bridges that are done from Optimism to Ethereum are not done by normal users.
Activity in Platforms
Conclusion
We saw that despite the market decline and in this bearish market for several months, the activity on the Optimism network had increased and the users of this network became more active, and more important than all these points, we saw that despite the sharp increase in activity, the transactions did not fail at all, and this It shows how powerful this network is.
So far, we have noticed that the number of Optimism network transactions has grown in this long-term bear market, and now let's see what kind of platforms this growth has been the most.
In this increase of activities in the Optimism network, we can see that the number of bridges has increased, that is, at the beginning of this process, only 12% of transactions were for bridges, but now more than 25% of transactions are bridges, which means that the enthusiasm of users to perform bridges is more It has doubled.
This down market has also had a negative impact because if you pay attention, you can see that the activity of Optimism network users in DeFi has clearly decreased, because at the beginning of this down market, 40% of network transactions were related to DeFi, but now only less than 28% of transactions for DeFi and this shows that this bearish market has reduced the interest of users to use DeFi.
DEXs are one of the most popular platforms on any network, because as I mentioned before, traders can earn profit by swapping their assets on DEXs, and it can be said that DEXs are one of the most popular platforms of any network, and the point that It is that the activity of users in DEXs has not changed during this bear market and before this bear market 30% of network transactions were for DEXs and even now around 30% of transactions are for DEXs. And this shows that the Dex still maintain their popularity in this network.