Questions

• How have the number of transactions changed over time for each Protocol?
• How much in fees have been spent on transactions relating to each protocol?
• Other things that can be explored are what type of transactions are each protocol producing, or has the price of ALGO been an influence on the number of transactions produced by each protocol.

Q115. Using the following App ID lists from Folks Finance, AlgoFi, Tinyman, and AlgoDex, lets look at what percent of transactions their app calls and associated transactions(transactions in the same tx_group_id) make up on the Algorand blockchain. 

How have the number of transactions changed over time for each Protocol?

Has the price of ALGO been an influence on the number of transactions produced by each protocol ?

We analyze this question by plotting scattered data between Tx volume of each protocol and ALGO price as shown in the right graphs.

Tx volume data has high volatility at many points, so we managed to plot Average 5-days of data instead to make it smoother.

We then plot linear trend line (red dashed line) of each graph and compute R-square value to evaluate dispersion of date along the trend line.

R-square value is between 0 and 1. If the value is close to 1, the data goes along with the trend line very well. If the value is near 0, the data has very high dispersion making to trend line has no significance.

By means of preventing bias between protocols, we pick the data since April 1st, 2022, because it is the day that the newest protocol, Folks, is launched.

> As we can see, all trend lines have positive slope, meaning, in average, Tx volume goes with the same trend as ALGO price.

However, each protocol has different dispersion of data. Folks protocol has lowest R-square value, because it has very low Tx volume and the protocol is new compare to others, making the data has high volatility from time to time.

The other 3 protocols have lower dispersion of data. However, Tinyman and AlgoFi have very high volatility Tx volume at ALGO price around 0.4-0.6 USD, caused by sharp drop of ALGO price during May 8th - May 12th (0.74 to 0.40 USD).

How much in fees have been spent on transactions relating to each protocol?

Overall Tx volume trend

As we can see the normalized Tx volume of protocols on the right, the first Tx occurred on Oct 28th, 2020. However the first Tx of our 4 protocols that can be queried began on Sep 30th, 2021, and it is Tx of Tinyman protocol.

Tinyman began on Sep 30th, 2021.

AlgoFi began on Dec 14th 2021.

AlgoDex began on Jan 20th 2022.

Folks began on April 1st, 2022.

> **Actually, there are 3 first early Tx of AlgoDex on Oct 3rd, 2021, but we think it has no significance in this analysis.

From the lower graph on the right, we can see total Tx volume had been increasing until beginning of January, after that, the big trend started to drop, expected to be caused by the incident that Tinyman was hacked source, we can also notice from tremendous lose of Tinyman’s Tx volume in this period, see in below graph (Tx volume of Tinyman).

After that AlgoFi Tx volume started to dominate until now.

Tx volume trend of 4 protocols

The Tx volume and daily sum fee graphs of 4 protocols are plotted below.

Tx volume trend of these 4 protocols follow the overall trend discussed above; kept increasing until Jan 2022 and then keep dropping until now.

Except AlgoFi that it kept increasing from Dec 2021 to April 2022, and then is quite stable until now, slightly drops.

Daily summation of fee trend has similar pattern as Tx volume’s

Approaches

• We query Tx data from flipside_prod_db.algorand.application_call_transaction , select and categorize Tx in 4 protocols; Tinyman

  AlgoFi, AlgoDex and Folks from given app_id information.

• Then, we analyze Tx data to answer the questions as will be presented.

Summation fee spent

• Tinyman has highest fee spent, 14,869 ALGO (23.8% of all protocols combined).
• Runner up is AlgoFi, with 14,752 ALGO (23.6%), not far from Tinyman.
• But AlgoFi lauched later than Tinyman for 2.5 months making AlgoFi has higher daily fee of 69.3 ALGO/day, while Tinyman has 52.7 ALGO/day, see below middle bar graph.
• Folks and AlgoDex have very low summation fee,
  • Folks has 72.55 ALGO (0.12%) and has daily fee of 0.70 ALGO/day.
  • AlgoDex has 164.13 ALGO(0.26%) and has daily fee of 0.98 ALGO/day.

Average fee per Tx

• AlgoDex and Tinyman have low average Tx fee around 0.001 ALGO, maybe because these protocols only execute simple DeFi activities like Transfer, Swap and Deposit.
• AlgoFi and Folks execute more complex activities like Lending and Borrowing, making them have higher Tx fee, hypothetically.

Conclusions

• All 4 protocols Tx volume have the similar big trend; increasing until Jan 2022 and then keep dropping until now.

  Except AlgoFi that it kept increasing from Dec 2021 to April 2022, and then is quite stable, slightly drop.

  \

• The main drive of overall Tx drop is expected to be caused by Tinyman-hacked incident in January source, and after that AlgoFi started to dominate.

  \

• Tinyman and AlgoFi have silmilar amount of fee spent, around 14.8k ALGO (23.7% of fee of all protocols), but AlgoFi has launched later for 2.5 months making it has higher sum fee/day.

  Folks and AlgoDex have very low summation fee, only 72.55 (0.12%) and 164.13 (0.26%) ALGO consecutively.

• In average, Tx volume of 4 protocols go with the same trend as ALGO price, but with different dispersion (R-square value).

  • Ranking R-square value AlgoDex (0.50) > AlgoFi (0.39) > Tinyman (0.33) > Folks (0.20), the higher R-square value, the lower volatility of the data goes with the trend.