Question:

Recently, Circle announced the implementation of an IBC-native USDC, inserting itself into an ecosystem where axlUSDC currently dominates.

Let's look at how pervasive axlUSDC is within IBC. Track Satellite bridge activity strictly related to axlUSDC transfer. Which app-chains have the most/least flows of axlUSDC? Looking at Osmosis specifically, analyze how dominant axlUSDC has become compared to both ATOM and other USDC assets in trading and pools.

Overview of analysis:

This analysis contains four major parts to investigate the activity of axlUSDC:

• axlUSDC on Satellite (general and over time)
• Chain analysis for axlUSDC token (draw popular paths)
• Trade analysis of axlUSDC on Osmosis
• LP actions by axlUSDC on Osmosis
• Compare activity of axlUSDC with ATOM and OSMO tokens

About Osmosis, Axelar and axlUSDC:

The Axelar network serves as the infrastructure for inter-chain exchanges. Axelar acts as both a bridge and a platform for cross-chain communication between smart contract protocols. Axelar bridging makes it possible to send tokens across different blockchains, while Axelar second feature allows decentralized applications to run on different networks.

Osmosis is an advanced Automated Marketer Protocol (AMM) that allows developers to build custom AMMs with robust liquidity pools. Osmosis is built using the Cosmos SDK and uses the Inter-Blockchain Communication (IBC) feature to enable cross-chain transactions. The Cosmes ecosystem follows the "Blockchain as Decentralized Program" architecture; This means that Osmosis is a blockchain connected to Cosmos Hub, which is also a decentralized exchange.

Satellite is one of the first ecosystem applications powered by the Axelar Network. Satellite is a decentralized cross-chain asset transfer application, which enables users to transfer assets they hold on a source chain to an address on a different destination chain.

Methodology:

The data provided by Flipside has been used to handle this analysis.

In this analysis, the following topics have been covered:

• The used table→ axelar.core.fact_transfers, osmosis.core.fact_swaps and osmosis.core.fact_liquidity_provider_actions

• Inflow and outflow analysis→ where transfer_type in ('IBC_TRANSFER_IN','IBC_TRANSFER_OUT')

• Identification of chains on Satellite→ ==By the use of the first words of sender and receiver address==

  regexp_substr (sender,'[a-zA-Z]+|\d+') as source_chain

• Drawing a bridge path→ CONCAT(source_chain,' -> ',Destination_chain) as transfer_path

• Token selection→

  • axlUSDC→ 'ibc/D189335C6E4A68B513C10AB227BF1C1D38C746766278BA3EEB4FB14124F1D858'
  • ATOM→ 'ibc/27394FB092D2ECCD56123C74F36E4C1F926001CEADA9CA97EA622B25F41E5EB2'
  • OSMO→ 'uosmo'

• Trade on Osmosis→ Swap from and to axlUSDC token, unique traders, average trade volume per day, 7-day moving average trade volume over time.

• LP actions on Osmosis liquidity pools→ Action type, Volume of LP actions per day, cumulative analysis related to LP actions

Part 1: Activity of axlUSDC on Satellite

Findings:

Now lets compare the usage of selected tokens on Satellite:

• The axlUSDC has been dominated the usage of Satellite bridge in every aspects.
• The average volume of transfer per day for axlUSDC token is near 930k USD by about 71 senders per day.
• ATOM has better performance than OSMO on Satellite bridge.

Findings:

• Most of the transfers for axlUSDC token is for inflow into the Axelar network.
• From all aspects like sender or volume of transfer per day, the inflow transfers have been dominated the usage of axlUSDC on Satellite bridge.
• The highest average transfer volume of axlUSDC token through Satellite occurred on April 18 to 25, 2022 with over 12.8k USD volume.
• The outflow transfers from Axelar started since May 16, 2022.
• The cumulative analysis related to the transfer volume reveals that the breakpoint of transfer out for axlUSDC was on September 12, 2022.

Part 2: Chain analysis for axlUSDC

Findings:

• The most popular destination chains for axlUSDC token on Satellite is Kujira and Osmosis from count of transers.
• By considering the volume of transfers, the Osmosis, Kujira and Evmos are most popular destinations.
• The highest average transfer volume by destination chain is for Evmos as can be seen.

Findings:

• The most popular source chains for axlUSDC on Satellite are Osmosis, Kujira and Terra blockchains.
• The highest average transfer volume for axlUSDC token through Satellite is for Terra chain.
• From the volume of transfer point of view, Osmosis has been dominated the source chains for axlUSDC token.

Part 3: Trade analysis of axlUSDC on Osmosis

Findings:

Now lets draw transfer paths for axlUSDC on Satellite bridge:

• The most popular transfer path is Osmosis→ Axelar from count of transfers, distinct senders and volume of transfer aspects.
• The Terra→ Axelar path has the highest average transfer volume among popular paths.
• In the last week of October, 2022 the transfer volume of axlUSDC token on Satellite increased and the dominated path on that date was Osmosis→ Axelar.

Part 4: LP analysis of axlUSDC on Osmosis

Findings:

• Most of the LP transactions for axlUSDC token on Osmosis are for joining pool or adding liquidity.
• The average volume of adding liquidity to pools by axlUSDC token is over 181k USD per day.
• Total volume of axlUSDC token used for adding liquidity to pools on Osmosis is over 36.6 million USD so far.

Findings:

• As can be seen from the first week of May 2022, the trade of axlUSDC token on Osmosis has been increased dramatically.
• The highest swap count occurred on the last week of October 2022 for both number and volume of swaps.
• The 7-day moving average volume of swaps for axlUSDC token on Osmosis demontrated the priority of “Swap From” over “Swap To” actions.
• The highest average swap volume for “Swap to axlUSDC” coincided with the Terra collapse.

Findings:

• From the count of swaps and swappers point of view, the swap to axlUSDC token on Osmosis is more than swap from it.
• From the volume of swap point of view the number are really close together for both swap from and swap to.
• The average swap volume for “Swap to axlUSDC” is more than swap from action.

Findings:

• The highest count and volume of adding liquidity to Osmosis pools for axlUSDC token happened on May 16 to 23, 2022 by 3423 unique LP providers.
• The cumulative analysis related to the LP actions of axlUSDC token on Osmosis pools reveals the breakpoint and validate the previous statement.
• On the first week of October 2022, the highest average volume of removing liquidity for axlUSDC token from Osmosis pools happened and on that date over 6 million USD axlUSDC token removed from liquidity pools.

Findings:

The comparison between axlUSDC, ATOM and OSMO tokens on LP actions has been drawn as:

• The ATOM is used more than other two for LP actions on Osmosis liquidity pools and OSMO takes the second rank from the volume of LPs in USD
• From the count of LP actions and unique LP providers aspects, the domination belongs to OSMO token by far.
• The highest average volume of LP action belong to OSMO on last week of September 2021.
• The highest average volume of LP action for axlUSDC token occurred on the first week of October 2022.

Findings:

Now lets compare the trade activity of axlUSDC with ATOM and OSMO tokens:

• The highest trade volume of Osmosis between the selected tokens belong to ATOM and OSMO stands in the second place.
• May 9 has the highest trade volume for all of the selected tokens and OSMO had over 212 million USD trade volume on that date,
• Since June, 2022 the axlUSDC token has been dominated the trade volume among selected tokens as can be seen.

Findings:

• Since May 9 2022, the axlUSDC has been dominated the application on Satellite bridge compared to ATOM and OSMO tokens.
• Over 195 million USD is volume of transfer for axlUSDC token through Satellite so far but for ATOM token which stands in the second rank this number is 7.32 million in USD.
• The daily average transfer volume of axlUSDC is higher than other two over time.
• On May 9 (week of Terra Collapse) the highest average transfer volume for axlUSDC captured.

Conclusion:

• The axlUSDC token is the dominated stable coin on Satellite bridge as can be seen.
• On Osmosis side, the trade volume of axlUSDC token was tremendously high since start of June, 2022 and more than OSMO and ATOM tokens.
• The application of axlUSDC on LP providing to Osmosis liquidity pools has increasing trend and can be compared to ATOM and OSMO token nowadays.
• By considering these statements, the axlUSDC token could not be ignored or forgotten on introducing new IBC base stable coin.

Useful links:

• Axelar network
• Satellite Bridge
• axlUSDC token

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani