Osmosis Introduction

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.

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.

Osmosis liquidity pool is a digital supply of cryptocurrency that is secured by a smart contract. As a result, liquidity is produced, allowing for quicker transactions. An important component of liquidity pools is automated market makers (AMMs). A liquidity pool helps to maintain liquidity on a network by rewarding users who contribute assets to the pool. These users receive liquid pool tokens as a reward, which are a portion of the fees from trades that occur within the pool

AMMs are typically pools of digital assets managed by a smart contract used to enable decentralized trading. The liquidity pools and smart contracts replace the order book system. liquidity providers lock their assets into the pool and earn fees when people trade in these pool.

Methodology

In this dashboard, I am going to mainly focus on wallet composition on Osmosis chain. meaning that we are going to check what type of wallets (Balance-Wise) perform what type of actions in Osmosis ? We are going to see weather Is liquidity concentrated and owned by a specific group (like whales) or not?

For this, Firstly, I am going to express some definitions of different wallet types in my own way which will be used to analyze data in this dashboard:

I have classified Osmosis users by their ==current== USD wallet balance into 7 groups as below: (for calculating the USD value of wallets balance, I have used osmosis.core.fact_daily_balances table joining with new Flipside’s Osmosis price table osmosis.core.ez_prices).

1. Humpback Whale: The wallet addresses with more than 10M USD balance in their wallet.
2. Whale: The wallet addresses with 1M - 10M USD balance in their wallet.
3. Shark: The wallet addresses with 100k - 1M USD balance in their wallet.
4. Dolphin: The wallet addresses with 10k - 100k USD balance in their wallet.
5. Fish: The wallet addresses with 1k - 10k USD balance in their wallet.
6. Crab: The wallet addresses with 100 - 1k USD balance in their wallet.
7. Shrimp: The wallet addresses with less than 100 USD balance in their wallet.

Considering above defination of different wallet types in Osmosis, I am going to:

• Calculate The Population of Each Wallet Type in Osmosis.
• Analyze Their Activity and Transactions Behavior in Osmosis.
• Analyze Popular Actions Made by Each Wallet Type in Osmosis.
• Analyze Swapping, Liquidity Providing & Staking Actions By Each Wallet Type in Osmosis.
• Then, Analyze data to see if LP composition change based on the TVL of the pools?

Based on the left charts, 83.5% of total Osmosis users (more than 414k unique wallets) are Shrimp (users with less than $100 balance in their wallet). So, these wallets play an important role within the Osmosis ecosystem despite their low $USD balance !

On the second rank, we have Crabs (users with $100 - $1k balance) with 12.2% share of total Osmosis users (more than 60.5k unique wallets.)

As it was predictable, the number of wallets with higher balances (Whales, Humpback Whales, Sharks and Dolphins) are less than other type of users.

The interesting thing is that there are only 8 Humpback Whales (users with more than $10M wallet balance) in Osmosis chain.

According to the above charts, more than 40% of liquidity providing actions on Osmosis are done by Shrimp users. The share of Shrimps (in terms of users count) is almost 73%. Crabs are on the second rank in this terms and fishes are on the 3rd rank.

But, most volume of liquidity on Osmosis (more than 25%) is provided by Fishes and the next rank belong to the Dolphins and Sharks.

As mentioned earlier, there is not any trace of Humpback Whales in liquidity providing actions.

So, we can not say the liquidity is concentrated and owned by a specific group because we have seen several groups of wallets participating in providing liquidity on Osmosis (especially in terms of volume)

The Liquidity Providing activity on Osmosis was increasing dramatically till March 2022, But after this timespan till today, we can see quite decreasing trend over time.

The share of Shrimps in providing liquidity actions on Osmosis is more than all other type of users in almost all days of the charts (in both terms of transactions and users count),

But in terms of volume, we can see almost equal and higher share of Dolphins, Sharks, Fishes & Crabs followed by Shrimps and Whales on the next ranks over time. The high volatile of liquidity providign actions during May & June (Terra collapse) is clearly visible on the chart.

During first months of the chart, we have seen more share of other types such as Fishes, Dolphins, Crabs and etc but as time goes on especially during recent months, we can see increasing share of Shrimps in liquidity providing actions on Osmosis.

First, let’s check the distribution of these wallet types and see how many users are there from each wallet type.

Liquidity Providing Actions

Summary and Conclusion

• Based on my own classification of users by their wallet type, (details mentioned above in the methodology section), 83.5% of total Osmosis users (more than 414k unique wallets) are Shrimp (users with less than $100 balance in their wallet). So, these wallets play an important role within the Osmosis ecosystem despite their low $USD balance.

• The interesting thing is that there are only 8 Humpback Whales (users with more than $10M wallet balance) in the Osmosis chain and they have only participated in Transferring within Osmosis and also Staking on this chain.

• Almost 3/4 of Swappers & Liquidity Providers & Stakers are Shrimps but the volume of actions by Fishes and Dolphins is more than them.

• Despite higher popularity of Shrimps and also their higher number of total transactions on Osmosis chain, Humpback Whales are the most active individual wallets in Osmosis since the average weekly activity and also average number of transactions per user in this group is more than all other type of wallets.

• Shrimps has the most number of one-time wallets and on the other hand, has the least number of users with more than 100 performed transactions on this chain. Dolphins have the highest share of users with more than 100 transactions.

• All (100%) of Humpback Whales transfers were done with more than $10,000 volume on Osmosis chain. On the other hand Shrimp users have the highest share of transfers with less than $10 volume.

• Humpback Whales were active in Osmosis chain less than 180 days.

• The share of users with most activity in Shark group is more than others (more than 365 days activity in chain).

• Shrimps have the highest share of low-activity users (less than 1 month)

• Swapping is the most popular action made by majority of these wallets in Osmosis chain followed by Transfer and Providing Liquidity.

• Humpback Whales have only done Inner Token Transfer within Osmosis and have a low share of Staking in this chain. These users have not performed any other activity on Osmosis chain such as Providing Liquidity, Governance Voting, etc.

• The popularity of Swap transactions among Sharks is more than other type of users.

• Shrimps have the highest share of Staking and also Governance Voting actions.

• Whales have the highest share of Liquidity Providing and Locked Liquidity Providing and also Superfluid Staking.

• Crabs have the highest share of Transfer Out and also Governance Proposing actions.

• The overall swapping, staking & liquidity providing activity within Osmosis chain was increasing till May & March 2022 but after these dates (and especially because of the May Terra collapse) there was a decline in these activities which is decreasing more and more over time.

• Totally, The share of different activities within Osmosis chain is well-distributed among different type (groups) of wallets and is not concentrated among specifig group of users (especially volume-wise)

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Based on the above left chart, as it was obvious, total number of transactions on Osmosis by Shrimps is more than other type of wallets (since they have the highest population in Osmosis).

But, On the 2 right charts, I have cacluated the average number of transactions per wallet and also average number of weekly transactions per wallet. As we see, Humpback Whales (despite their very low population) are the most active Osmosis users with a big difference from other type of wallets and the activity of Shrimps and Crabs (as users with the highest population in Chain) are the least active wallets in Osmosis.

On the above and left charts, we can see the distribution of different Osmosis wallet types by their number of transactions, volume of transfers and also number of active days in Osmosis chain.

On the left above chart, we can see Shrimps has the most number of one-time wallets and on the other hand, has the least number of users with more than 100 performed transactions on this chain. Moreover, we can see Dolphins (wallets with 10k - 100k USD balance) have the highest share of users with more than 100 transactions.

On the right above chart, all (100%) of Humpback Whales transfers were done with more than $10,000 volume on Osmosis chain. On the other hand and as it was predictable, Shrimp users have the highest share of transfers with less than $10 volume.

And on the left chart, we can see that Humpback Whales were active in Osmosis chain less than 180 days. The share of users with most activity in Shark group is more than others (more than 365 days activity in chain). Shrimps have the highest share of low-activity users (less than 1 month)

Swapping Activity

Staking Actions

On the above charts, we can see the evolution of Swapping actions in Osmosis breakdown by wallet types in this chain. As we see, in Majority of days, Shrimps have the highest share of these actions (in terms of number of actions and also active users) but we can see increasing share of Crabs after January 2022 as well as positive growth rate of Sharks during the recent months. In terms of volume, Fishes have the highest dominance in majority of days but as time goes on and especially during the recent months (after July 2022) we can see increasing share of Sharks and Dolphins as time goes on and we can say in the near future, Sharks can overtake Fishes as users with the highest volume of swap actions in Osmosis chain. We can also see a huge high spike of swapping activity within Osmosis chain on May 2022 and this can be mainly because of Terra collapse within this month that have resulted in heavy crash of whole cryptocurrency market. Moreover, We can see the total swap activity within Osmosis chain was increasing till May 2022 but after Terra collapse, the swapping activity within this chain has decreased in all terms.

As mentioned above, Swaping is the most popular action among Shrimps (especially in terms of users count) followed by Crabs and Fish and as we see, there is not any trace of Humpback Whales in this type of action.

The interesting thing is that Fishes are the wallet type with the highest share of swapping actions in terms of volume and Dolphins are on the second rank while Shrimps (as the most active swappers) are on the 3rd rank .

So, we can not say the swapping activity is concentrated and owned by a specific because we have seen several groups of wallets participating in swapping actions on Osmosis. (especially in Volume).

The result on Staking actions in Osmosis is similar to the swapping. As we see, Shrimps has the highest share (in terms of number of transactions and users) of stake actions within Osmosis chain but in terms of volume, Fishes and Dolphins and Sharks are the three groups with highest share of Staking volume on Osmosis. Totally, The interesting thing is that Humpback Whales have very low share of number of stake transactions and also stakers but the share of their volume of stake is high compared to the number of actions.

Similar to the other actions, Staking activity is not also concentrated within a specific group of users and we can see a variety of groups participating in these actions (especially in terms of volume).

On these charts, we can see the dominance of Shrimps in almost all days within the charts in terms of number of stake transactions and also unique stakers. The number of stake transactions and especially unique stakers on Osmosis is kinda increasing over time which is a good and positive point for this chain. But in terms of volume, Fishes and Dolphins have the highest share in majority of days. Totally, we can see the volume staking activity on Osmosis was increasing significantly before The Terra collapse on May but after this month, we can see a massive decline in the volume of these actions which is decreasing more and more as time goes on.

On the above charts, we can see the popular Osmosis actions made by each wallet type in this chain. Totally, we can see that Swapping is the most popular action made by majority of these wallets in Osmosis chain followed by Transfer and Providing Liquidity.

The interesting thing is that Humpback Whales have only done Inner Token Transfer within Osmosis and have a low share of Staking in this chain. These users have not performed any other activity on Osmosis chain such as Providing Liquidity, Governance Voting, etc.

The popularity of Swap transactions among Sharks is more than other type of users.

Shrimps have the highest share of Staking and also Governance Voting actions.

Whales have the highest share of Liquidity Providing and Locked Liquidity Providing and also Superfluid Staking.

Crabs have the highest share of Transfer Out and also Governance Proposing actions.