Question:

Background: Axelar’s first ecosystem project, Squid, launched last week as a cross-chain liquidity router.

Task:  Using the relevant contracts found here, analyze Squid’s first week of activity. Provide analysis on the following metrics:

1. Total Unique Users
2. Average USDC transfer amount
3. Most popular source/destination chains
4. Most popular pathways
5. Total Unique Tokens swapped
6. Total Volume transferred

Overview of essay:

In this essay, we are going to study the DEX activity of Squid router on various chains. For this purpose various sectors have been analyzed to assess the performance of Squid router.

This analysis divided into the following parts:

• Squid activity (General and Overtime)
• Chains and transfer pathways
• Popular tokens swapped on each chain

Axelar network and Squid router:

Axelar network is a scalable cross-chain communication platform. Blockchain platform builders can use it to seamlessly plug-in their blockchains to all other blockchain ecosystems. Application developers can choose the best blockchain to host their applications and use Axelar’s cross-chain communication protocols to lock, unlock, and transfer assets, as well as communicate with applications on any other chain. By connecting dapps with multiple blockchain ecosystems, the Axelar platform empowers users to interact with all applications across the ecosystem directly from their wallets.

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.

Squid is the cross-chain swap and liquidity routing protocol on Axelar Network.

Squid utilises existing DEXs to swap and send any native token between chains. This can be done via our SDK, Front End or Contracts directly.

Swaps are composable with Axelar's generalised message passing, so Squid can enable one-click transactions between any application and any user, using any asset.

Buy NFTs from any marketplace, use multi-chain DeFi, play a game on another chain, all without signing multiple transactions or downloading multiple wallets.

Resources: Axelar and Squid

Methodology:

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

This dashboard divided into the three major sections as below:

• Squid activity:
  • Chains→ Ethereum, Polygon, BSC, Avalanche and Arbitrum
  • Approach→ Use fact_token_transfers and fact_event_logs tables and join them with tx_hash
  • Metrics→ Total transfer and unique senders, Total volume of transfer, Average and median of transfer volume, Average sender per day, Average volume of transfer per day, Overtime and cumulative analysis
• Chains and transfer pathways:
  • Popular source and target chains
  • Popular transfer pathways
  • Metrics→ Volume of transfer, Count of transfers and unique senders, Average and median of transfer, Average transfer volume per day.
• Popular tokens swapped on each chain:
  • Note→ BSC tables does not support dim.contracts and its impossible to identify the tokens on this network
  • Metrics→ Volume or count of swaps for tokens

Part 1: Squid activity (General and Overtime)

Part 4: Summary and references

Key Findings:

The final part is about the most popular tokens swapped via Squid router on various chains:

• As expected, the WETH and USDT are two of the most popular tokens swapped on Ethereum network via Squid router. Also, the WETH has dominated the count of swaps and unique users on Ethereum side of Squid router.

• The most popular token swapped on Avalanche network is WAVAX with near 90% domination.

• On Arbitrum chain, the WETH has highest share for swapped token via Squid router among other tokens.

• Also, the WMATIC and USDT are two of the most popular tokens swapped by Squid router on Polygon network. However, the domination of WMATIC token is considerably higher than other tokens.

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Key Findings:

This part is used to identify the most popular source, target and pathways of transfer by Squid router. Also, divided into the three sub-sections and the outcomes are as below:

• The most popular source chain based on the volume of transfer is Ethereum network as can be seen. However, the most popular target chain by volume for transfers via Squid router is Fantom.

• Various metrics have been utilized to identify the most popular transfer pathways. According to the volume of transfer, the Ethereum→ Fantom path has the highest volume. However, the Polygon→ Avalanche transfer path has the highest count of transfers and unique senders due to the outcomes.

• Polygon network has the highest count of transfers for both source and target chain among other selected networks.

• The highest average volume of transfer via Squid router occurred on BSC→ Celo transfer path with more than 1622 USD.

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Part 3: Popular tokens swapped on each chain

Part 2-2: Popular target chains

Part 2-3: Popular transfer pathways

Part 2: Chains and transfer pathways

Part 2-1: Popular source chains

Key Findings:

This part concentrated on the activity of Squid router based on the selected addresses:

• According to the outcomes, the transfer volume on Squid has been spiked since first days of February and the highest volume of transfer occurred on February 9, 2023.
• The average count of users interacted with Squid router per day is about 20 persons and the average volume of transfer per day for these users is about 11.28k USD.
• The average volume of transfer demonstrated in the scatter plot and as can be seen, the highest average volume occurred on February 12 with more than 1088 USD.
• The cumulative analysis reveals the breakpoint on all of the three charts (count of transfer, unique senders and volume) have been occurred on the first week of February 2023.

Conclusion:

By the use of combination of the above parts, the following statements could be concluded:

• The Squid router and Axelar network are becoming increasingly popular due to their easy-to-use features and increasing trend in the market. The Squid router is a reliable router that is easy to install and configure, while the Axelar network is a powerful network solution that provides secure and reliable connections. Both of these products are designed to be user-friendly and provide a great user experience. With the increasing trend of these products, more and more people are turning to them for sending assets to other blockchains.
• After this project was unveiled, its usage has increased dramatically. Ethereum and Polygon can be mentioned among the most popular networks where many users have used Squid router.
• Due to the nature of the selected blockchains, the WETH and WMATIC are two of the most popular wrapped assets swapped via Squid router.

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani

Useful links:

• Axelar network
• Squid router
• Axelar scanner