Sushi and the Merge
The Ethereum merge brought some uncertainty to DEFI markets. It got many market makers (MM) to remove liquidity from defi to lower their risk. After the merge, some have redeployed the liquidity, and some haven't.
Some insights on the main keywords
What are DEFI markets?
Decentralized finance, or DeFi, uses emerging technology to remove third parties and centralized institutions from financial transactions. The components of DeFi are stablecoins, software, and hardware that enables the development of applications.
What is SushiSwap?
SushiSwap is a decentralized exchange (DEX) in which users can exchange between different virtual currencies using a connected cryptocurrency wallet, such as MetaMask. The exchange allows swapping between 11,700 currency pairs.
What was Ethereum Merge?
Merge was the joining of the original execution layer of Ethereum with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the the network to be secured using staked ETH. It was a truly exciting step in realizing the Ethereum vision more scalability, security, and sustainability allows the Ethereum network to reduce its energy consumption by around 99% thus making mining ETH unnecessary, ==merge happened on 2022/09/15.==
Who is a market maker(MM)?
A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the bid–ask spread, or turn. The function of a market maker is to help limit price variation (volatility) by setting a limited trading price range for the assets being traded. In cryptocurrency market MMs are An individual or organization that buys and sells through a crypto exchange to provide liquidity and depth while earning profits through the difference in the bid-ask spread can be a successful crypto market maker.
What is Tokemak?
A novel protocol designed to generate deep, sustainable liquidity for DeFi and future tokenized applications that will arise throughout the growth and evolution of web3.




Main focus of these analysis
- Analyzing the behavior of Sushi Market Makers(MMs) 2 weeks prior to and after the ETH merge.
- Visualizing that how much capital they withdraw and which pools/chains got affected the most.
- Showing if these MMs redeployed back their capitals and an attempt to identity these MMs.
Methodology
Most of the needed data was extracted via using dim_dex_liquidity_pools
for metrics about pools on Sushiswap, ez_token_transfers
and fact_event_logs
for liquidity and liquidity related transactions and transfers such as depositing or withdrawing and other related metric these tables was provided by Flipsidecrypto database, for making these raw extracted data more comprehensible all types of proper charts and graphs were used and interpreted.
This analysis was made on 2022/10/04, two weeks before and after the merge was used as the main timeframe.
Conclusion
- Most popular pool on Sushiswap by circulated USD volume both before(36M) and after(49M) merge is USDC-wETH pool, this pool is also eating eve more into other late merge pools looks like the merge effected most of the relatively smaller share pools compared to USDC-wETH by completely ingulfing them but pools like Aave-wETH and wETH-USDT lost their 2nd and 3rd spot after the merge and can be considered the most affected pool after the merge, after the merge its somewhat expected due to USDC being a popular stable coin on mainnet it also amplified by the fact that most of the large NFT markets use wETH as the main buying token.
- Overall most of the withdrawing from Sushiswap pools was on 14 Sep 2022 a day before merge with a net volume of 65M USD outflow, highest volume of USD deposited on these pools was on merge day Sep15 2022 with a net value of 11.7M USD, looks like net flow of two weeks before the merge is -119M USD and 10.7M after the merge it can be due to whales and other smaller share holders were withdrawing their assets right before the merge and out of these wallets only 11% (86 users) of addresses returned and redeployed their assets.
- Sep16 had most depositing transactions(116) worth 29M USD, for withdrawing it was on Sep14 2022 with 120 transactions worth 17.5M USD and a total of 58M USD is deposited after merge and 42M withdrawn before merge.
- The fact that more than 55% of the withdraws are more between 1K- 50K USD compared to 42% deposits being less than 500 USD proves that most of the pro traders and whales were monitoring the merge closely and reacted to it.
- Wallet address
0x60ca1f1f3abc9146cc7561d39c9ab1a7a279f83f
with 12.4M USD redeployed liquidity can be considered one of the most loyal users on Suishiswap followed by0x9e0bce7ec474b481492610eb9dd5d69eb03718d5
aka Tokemak with 6.82M addresses0x6914fc70fac4cab20a8922e900c4ba57feecf8e1
aka a USDP whale and0x106fc088aba908130fbc343f2f6d212ff36150d1
have not yet redeployed 15M and 13M USD respectively, worth of assets back on Sushiswap after the merge and overall only 86 wallets out of 758 wallets returned after the merge which most of them redeployed between 1K-10K USD (29%) followed by wallets (22%) redeploying more than 100K USD.
Overall with all the gathered data in this analysis about Sushiswap pools and my personal finding ETH switching to POS encouraged users to have more ETH based activities specially staking and depositing ETH itself and its derivatives.
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Thank You for Your Time!
[1]Discoveries
- The USDC to wETH is the most popular pool with its total USD volume generated from 36M two week before the merge to 49M USD after it and ate more into share of other pools after merge.
- Aave to wETH and wETH to USDT pools lost the second and third most popular pool spot after the merge this pools had 13M and 8.4M volume in USD circulation before the merge and most of the other top 10 pools before merge such as Aave-wETH, Ohm-Dai, Yfi-wETH, Srm-wETH and Toke-wETH are not present in the top10 list after the merge.
[2]Discoveries
- Just a day before the merge on Sep14 65.88M USD was withdrawn from pools on Sushiswap leaving it with net flow of -65.81M USD this was the most outflow in both two week before and after the merge.
- Highest inflow was on the day of the merge Sep15 with 35M deposits leaving it with the most positive flow to Sushiswap pool with a net of 11.7M USD.
- Overall most of the outflow was before the merge with 125.9M USD and a net of 119.6M and in total most of the inflows was after merge with 71M in USD inflows leaving it with a net of 10.7M USD positive flow.
[3]Discoveries
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Most amount of liquidity providing transactions done by unique users was a day after the merge on Sep16 with 116 transactions done by 96 users overall both depositing transactions and individual users had notable(around 10% more than before merge,1.2K transactions vs 0.88K) increase after the merge, on Sushiswap.
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Highest amount of withdrawing liquidity transactions done by unique users was a day before the merge on Sep14 with 120 transactions done by 93, users this date also had the most amount of transactions in that four week time frame overall most of the withdrawing transactions on Sushiswap was before the merge(900vs700 transactions) probably due to users being prepared for the merge.
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A total of 58.8M USD was circulated depositing on Sushiswap after the merge and a volume of 42M USD circulated withdrawing before the merge so there is more deposit USD volume after merge compared to withdrawing before the merge.
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Most volume of the USD circulated by depositing was on Sep15 and the day after with 29.7M and 8.6M USD respectively.
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Highest USD circulations by withdrawing was on Sep14 with volume of 17.5M.
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Majority of users(274) withdrew between 1K and 10K followed by 10K-50K USD before merge must be due to large wallets are mostly active traders and will dynamically react to big events like ETH merge.
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300 users (40%) preferred to deposit less than 500USD after the merge followed by 29% preferring 1K -10K USD.
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Capitals(USD)
[4]Discoveries
- Address
0x60ca1f1f3abc9146cc7561d39c9ab1a7a279f83f
redeployed the most assets (12.4M) followed by0x9e0bce7ec474b481492610eb9dd5d69eb03718d5
aka Tokemak with volume of 6.82M. 0x6914fc70fac4cab20a8922e900c4ba57feecf8e1
aka a well known USDP whale and0x106fc088aba908130fbc343f2f6d212ff36150d1
both did not redeployed any of volume of 15M and 13M assets after the merge these two alone are around 50% of none liquidity redeploying.- More than 88%(672) of users did not redeployed their liquidity to the pools after the merge and most of the wallets who did deployed between 1K - 10K and(22%) deployed more than 100K after the merge these must be whale who are returning to the sea!