Introductions
What is Optimism?
Optimism is a fast, stable, and scalable L2 blockchain built by Ethereum developers, for Ethereum developers. Built as a minimal extension to existing Ethereum software, Optimism’s EVM-equivalent architecture scales your Ethereum apps without surprises. If it works on Ethereum, it works on Optimism at a fraction of the cost. more info
What is Velodrome?
Velodrome Finance is the liquidity base layer for the entire Optimism ecosystem. Launched in June 2022, it focuses on properly incentivizing liquidity for DeFi protocols. Interestingly, Velodrome is built on the foundation put in place by Solidly. more info
What is liquidity providing?
A liquidity provider (LPer), also known as a market maker, is someone who provides their crypto assets to a platform to help with decentralization of trading. In return they are rewarded with fees generated by trades on that platform, which can be thought of as a form of passive income.
What is swapping?
Swap facilitates the instant exchange of two non-native tokens between two unique blockchain protocols without the need of commencing the traditional crypto-to-fiat exchange or token migration. It allows users to swap tokens directly from the official private key wallet or the trading account.


Methodology
Using tables like optimism.velodrome.ez_lp_actions
for all the mentioned liquidity providing actions and optimism.velodrome.ez_swaps
for extracting swapping metrics and gas fees spent on Velodrome which was extracted via Flipsidecrypto database the needed raw data was gathered and an array of proper chart and graphs were used to further help these metrics more comprehensible.
[1]Discoveries
- Beside its second day of release on Jun2 2022, Velodrome had its highest liquidity provided volume on Mar10 2023 with 87M via 2.2K transactions done by 955 unique liquidity providers, Jan12 2023 had the most transactions (17K) and LPers (9K).
- Overtime volume of LP volume and transactions increased but oddly with all of the late increases in LP volume recorded on the platform, number of LPs and LPers dropped significantly this could indicates some whale or insider activities increasing on the platform.
- A total of 1.99B USD was LPed on Velodrome via 1M LPs done by 450K LPers compared to daily accumulated users and their LPs, LPing volume is experiencing a less steeper growth in late 2022 but it changed after second month of 2023 which LPed volume on the platform saw a nearly 99% growth in just less than 2 month.
- Most swapping volume ever on Velodrome was Feb24 2023 with total volume of 76M via 58K swapping transactions done by 8.8K swappers, most swappers recorded was also on the mentioned date.
- Seems that swapping on Velodrome keeping its hype and momentum among users.
- Overall 3.9B USD was swapped on Velodrome via 5.8M swaps done via 860K swappers, swappers count have relatively the most healthy and predictable growth slope compared to LPs and LPed volume.
- Looks like in general Velodrome have gained more relevancy late 2022 to early 2023 these could be the aftermath of the notorious FTX crash taking its effect in the year.
[2]Discoveries
- Largest volume of liquidity provided in Q4 2022 was 10.1M on Dec11 (with average of 850 LPed volume per transactions) which plummeted to 3M the next day, there was a upward trend to LPed volume on the platform started last week of Jan 2023 which peaked to 87M LPed on Mar10 2023, overall there was more volume of provided liquidity 1.07B out of 1.33B accumulated in Q1 2023 which naturally had a larger growth as well compared to the last quarter of 2022.
- Q1 2023 saw some increase to the highest highs of LPs and LPers (Jan12 with 17K swaps and 9K swappers was the peak) in the first two weeks of the new year but suddenly number of LPers and their interactions on the platform had a roughly 90% drop after Jan17 2023 to levels less than 2022 and is yet failed to recover. overall both liquidity providers and their activities decreased in Q1 2023 indicates most if users lost their usual LPing confidence less than a month into 2023 considering while LPed volume was increasing parallel to the latter this could indicates that whales/insider being more active on the LP side of the platform.
[3]Discoveries
- Largest swapping volume in a single day Q1 last year, was 42M on Nov8 following FTX fiasco, highest volume swapped in the first three months of 2023 was on Feb24 with 76M swapped, Mar10 had the most average volume swapping per transaction with volume of 1.4K per transaction, Average volume per transactions is in a upward trend since beginning of 2023, in general there was more swapping volume in 2023 (1.4B) compared to volume swapped in Q4 2022 (724M) therefore accumulation of swapped volume on the platforms saw a much more steeper growth in 2023 which can indicates an even more promising year ahead.
- In the 6 months span of this analysis, number of swaps and swappers have not had a meaningful or drastic change in the new year, the effect of FTX crash on the platforms swapping scene is visible in early Nov 2022. and overall the was 1.73B via 300K swappers vs 1.67B swaps via 325K swappers were recorded on Q1 2023 vs Q4 2022 respectively.
- The fact that there not much change in the swappers and their activities on the platforms while swapped volume increased in 2023 could indicates that users are starting to have more trust and are more comfortable swapping more volume of their assets on the platform.
[4]Discoveries
- Highest average gas fee spent was recorded 0.174 and 0.176 on Feb23 and 24 while the highest average spent fee Q4 2024 was 0.04 on Nov10, overall seems that average spent fee on the platform started to skyrocket after Feb 2023 with total average spent fee jumping from 0.02 in Q4 2022 to 0.3 in Q1 2023.
- In the analyzed time frame a total of 637K USD was spent on gas fees which, 496K was spent in Q1 2023 probably due to larger volumes of transactions being recorded first three months of 2023, highest spent gas fee was 35.9K in Feb24 2023.
Conclusion
Seems that new year, at least it first three month other than some odd statistics regarding LPs and LPers was a successful start for the platform in both LP and swapping scenes other than some risen concern regarding gas fees this should be a promising year for the platform.
Thank you for your time!