Overview

• In this analysis we look at the following health metrics of Velodrome AMM.
  • Swap Metrics, Number of swaps, swappers, swap volume, etc.
  • Liquidity Added or Removed.
  • Amount of $Velo Locked.
  • Governance and Voting.
• We only look at the past 30 days of data to see the current health of the system.

What is Velodrome ?

• Velodrome is an AMM designed as the trading and liquidity marketplace on Optimism network, launching on May 31st 2022.
  • Their mission is to be the liquidity base layer of Optimism, allowing users to trade digital assets in a secure way, with very low fees and low slippage.
  • As an AMM adapted from Solidly, Velodrome shares certain features with AMMs like Uniswap, with certain modifications:
  • trading fee of 0.02%
  • near-zero slippage on uncorrelated or tightly correlated digital assets
  • route trades through stable and volatile asset pairs no-upkeep, flashloan-proof, 30 minute time-weighted average price (TWAP) with direct quoting support
  • It incorporates elements of Curve, Solidly and Votium with ve(3,3) tokenomoics.[1]
• Velodrome was inspired by Solidly, which was designed as a next-gen AMM optimized to facilitate the swapping of both correlated and uncorrelated assets. Similar to Curve, those who lock their tokens are able to vote to steer emissions to desired pools and receive a cut of protocol fee revenue[2]

Total number of swaps by day over the last month

• Number of swaps see an increasing trend, highest being 180K swaps on July 29, 2022.
• The current trend is ~100K swaps daily as of last week.

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Total number of wallets swapping by day

• Number of swappers see an increasing trend, highest being 8.3K swappers on July 28, 2022.

• The current trend is ~4K swappers daily as of last week.

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What are the most popular asset pairs to swap from and to

• The most popular pair in terms of number of swappers is OP→USDC with 15.3K swappers.

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Top 10 assets Swapped To

• The most popular asset swapped to in terms of number of swappers is USDC with 58K swappers.
• USDC is the top asset swapped to in terms of number of swaps with 811K swaps.
• USDC is the top asset in terms of swapped amount with 431M $USD

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Top 10 assets to Swapped From

• The most popular asset swapped from in terms of number of swappers is USDC with 53K swappers.
• USDC is the top asset swapped from in terms of number of swaps with 738K swaps.
• USDC is the top asset in terms of swapped amount with 436M $USD

Liquidity

• The number of Liquidity Providing Transactions saw an increasing trend till Aug 3, 2022, however after that we have seen a decrease in the number of transactions.
• We do an overall increase in the number of withdraw transactions and decrease in the number of deposit transactions.
• The most popular pool is VELO-USDC pool with 20K LP transactions so far and 162 unique Liquidity Providers.
• In terms of Liquidity, USDC/sUSD in the most popular pool with 11.4M $USD added in liquidity in the past 30 days.
• In the past 30 days, 140M $USD has been withdrawn and 190M $USD has been added as liquidity.

Amount of $VELO Locked

• The amount of $VELO locked has seen normal numbers, except a few peaks, the amount of $VELO locked is between 1M-3M daily.
• The number of user locking is see an increase daily trend on an average with 150users locking $VELO every day.
• The average duration of $VELO locked has seen high numbers with wallets locking $VELO for around 3 years on an average daily.

Governance and Voting

• We have seen a growth in the number of daily votes in the recent times, some peaks were made in the recent times of about 600 users voting in a single day.
• The most popular pool is 0x47029bc8f5cbe3b464004e87ef9c9419a48018cd, which is the OP/USDC pool.

Conclusion

• Most of the health metrics suggest Velodrome is doing well, especially swaps metrics and the $VELO locked.
• The liquidity being added is a bit concerning, however given the bear market, that is expected, we should see the numbers improve as market conditions improve.