Overview of analysis:

Decentralized exchanges (DEX) are peer-to-peer markets where digital currency traders conduct their transactions directly without entrusting the management of their funds to an intermediary or third party. These transactions are facilitated through the use of self-executing agreements or smart contracts. DEXs were created to eliminate the need for any authority to monitor and authorize transactions made on a particular exchange. Decentralized exchanges enable peer-to-peer (P2P) trading of cryptocurrencies.

On the Arbitrum blockchain, there are currently two major DEXs that have been developed: Sushiswap and Uniswap.

Let’s take a closer look at these DEXs on Arbitrum. The challenge here is to build the Ultimate On-chain Exchange Dashboard that will keep Arbitrum ecosystem users informed about the exchanges in the Arbitrume blockchain and allow them to compare their options.

This dashboard is divided into the following parts:

• Comparison of DEXs (general and over time)
• Popular assets and behavior of swappers
• Summary and references

Methodology:

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

First of all wanna talk about excluding some swaps from the tables. By investigation on the swaps of various programs it can be seen that some swaps has unnormal USD amount as swap volume and the main reason of that is because of price table and its missing data. To deal with that the following approach has been adopted:

• Find out the USD volume of swap in and out and select the transactions that have difference_usd<500 means that difference of swap volume should be under 500 USD.

• Swap related metrics→ Swaps, traders, volume in USD, cumulative analysis, 7-day moving average, average trader, and volume of trade per day

• Popular assets and asset pairs identified based on: Volume, swaps, traders and etc.

• Other metrics related to traders→

  • Distribution of traders by swap count
  • Distribution of traders by swap size (in USD)

Arbitrum Network:

The purpose of creating the Arbitrum network (and other rollups) is to solve the scalability problem of the Ethereum network. Blockchains seek to establish three features: scalability, decentralization, and security. The conclusion we reached in the world of digital currencies over the past decade was that it is very difficult (if not impossible) to establish all three of these features in one network. Therefore, each network seeks to solve one of the missing sides in its own way; The base layer of the Ethereum network, which has two features of security and decentralization, is left to solve the problem through roll-ups. The increasing demand for Ethereum network block space has made this network more expensive (gas cost) in recent years. Arbitrum and another layer 2 utilities can greatly reduce the pressure by increasing the capacity of this network. By aggregating transactions and executing them off-chain, Arbitrum greatly lowers the cost of each transaction. However, data related to transactions (Data Availability) is recorded in layer one, so for any external observer, the results are reproducible and their accuracy can be ensured.

Part 1: Comparison of DEXs (general and over time)

Key Findings:

This part concentrated on the main comparison of the Sushiswap and Uniswap DEXs:

• The Uniswap program has dominated the DEXs on the Arbitrum as can be seen. The trade volume on Uniswap is 4 times higher than Sushiswap program.
• The average swap size on Uniswap is more than Suhiswap program.
• From the point of unique swappers, the Suhiswap and Uniswap are really close together but the superiority belong to Uniswap.
• One of the most important features to compare the DEXs is average swap volume (in USD) per day. According to this metric, the Uniswap has more average swap volume than Uniswap.

Key Findings:

• The most popular swap pair on Suhiswap is WETH→ USDC pair from count of swaps aspect. Also, the USDC→ WETH pair has the highest volume of trade on Suhiswap.
• On Uniswap, the USDC→ WETH pair has dominated the asset pairs from every aspect of analysis.
• On Uniswap, the share of users made more than 5 swaps is higher than Sushiswap program and this indicates the popularity of the Uniswap among swappers on Arbitrum.
• The volume of swaps on Uniswap is higher than Sushiswap according to the distribution of unique swappers based on the swap size (in USD).
• About 60% of swappers on Sushiswap have swap size under 20 USD but for Uniswap, about 50% of swappers made swaps for under 20 USD.

Author:

Credited by MZG

Discord handle: m.zamani#0361

Twitter handle: @GargariZamani

Useful links:

• Arbitrum network
• Sushiswap
• Uniswap

Conclusion:

According to the results of the previous sections, the following decisions can be made:

• Both Sushiswap and Uniswap are decentralized exchanges (DEXs) based on the Ethereum blockchain that allows users to trade digital assets. However, they differ significantly when it comes to their use of the Arbitrum blockchain.

• Sushiswap is a fork of Uniswap that is designed to be compatible with both Ethereum and Arbitrum, allowing users to interact directly with both blockchains. It also has built-in incentives for liquidity providers, so they can earn rewards from trading fees.

• On the other hand, Uniswap does not have this feature and only supports transactions on Ethereum's blockchain. Additionally, it requires traders to pay gas fees in order to execute their trades which can be costly depending on current network conditions.

• Overall, while both Sushiswap and Uniswap are great options for DEXs, they each have unique advantages over the other when used in conjunction with the Arbitrum blockchain. Sushiswaps ability to interact directly with both blockchains allows it greater flexibility while its reward system makes it more attractive for liquidity providers than Unis

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Key Findings:

The time period of this investigation can be changed from 30 to 180 days. Also, the basis on analysis can change between Daily, Weekly and Monthly basises.

• Based on the outcomes, the swap count of Suhsiswap has passed the Uniswap since January 18, 2022.
• Most of the times, the swap volume on Uniswap was more than Uniswap but since start of February, the volume of swaps (in USD) enhanced for Suhsiswap and passed Uniswap.
• The average swap volume (in USD) for Uniswap was more than Sushiswap according to the scatter plot.
• The highest average swap volume (in USD) for Uniswap occurred on January 23 with more than 6k USD and for Sushiswap happened on Februrary 8 with more than 2600 USD.

Part 3: Summary and references

Key Findings:

• The popular assets on Uniswap have been identified based on the swap volume and unique swappers. According to the results, the WETH is the most dominant asset on Uniswap.
• The most popular assets on Sushiswap are WETH and USDC from the aspects of trade volume, count of swaps and unique swappers.

Part 2: Popular assets and behavior of swappers