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Q9. On the Osmosis Frontier, there are pools for wETH and wBTC. How do users respond and change their position in these pools in response to governance proposals involving extra incentives for these pools? Do their deposits and withdrawals of wBTC and wETH onto Osmosis change as well?
Introduction:
The governance proposals and voting pattern on them affected the position of liquidity providers on pool.
In this bounty, the wETH/OSMO and wBTC/OSMO pools are selected and the aim of this investigation is to find the impacts of proposals on position of LP providers on pool.
The position of LP providers are found by:
- Volume of deposit and withdrawal
- Number of unique LP providers and removers
Methodology:
The first step of methodology is finding the proposals related to the wETH/OSMO and wBTC/OSMO pools. For this purpose, the official website of proposal is used and proposal found and mentioned in the next section.
After obtaining proposal, the position of LP providers on pools is estimated based on:
- Select transactions and LIQUIDITY_PROVIDER_ADDRESS from osmosis.core.fact_liquidity_provider_actions
- For wETH/OSMO pool, the pool_id should be 704
- For wBTC/OSMO pool, the pool_id should be 712
- The currency must be set to wETH and wBTC
According to the proposals and related figures:
- Just before end of proposal #235, the volume of provided wETH increased specially on May 25.
- Two days before end of voting period of proposal #223, the number of LP providers and the volume of wETH have been increased.
Proposals:
- #235--> PASSED--> Enable Superfluid Staking on OSMO/DAI (#674), OSMO/USDC (#678) and OSMO/ETH(#704)--> end: 2022-05-26 03:15:51
- #223--> PASSED--> Reallocate half of the Incentives on OSMO/LUNA (#561) to OSMO/ETH (#704) & approve the pool for Osmosis incentives--> end: 2022-05-17 21:16:17
Proposals:
- #229--> PASSED--> WBTC Incentivised pool with Minimum Incentives of 5%--> end: 2022-05-21 20:49:06
- #239--> PASSED--> Enable Superfluid Staking on OSMO/WBTC--> end:2022-05-31 12:28:54
Based on the mentioned proposals on wBTC/OSMO pool and the figures above:
- Right after the end voting for proposal #229, the number of LP providers risen also the amount of provided wBTC is enhanced.
- After getting passed for proposal #239 on governance voting, the deposit of wBTC enhanced and withdrawal decreased, respectively. Additionally, The number of LP providers is increased from 186 unique provider to 285.