Try Quests to earn cryptoDo incentivized wAssets impact transfer volumes on Axelar?
What is the Question?🚨
How do incentivized wAssets on Osmosis impact token transfer volumes for Axelar?
Background: Most "wrapped" assets (WETH, WMATIC, WBNB, WAVAX, etc.) arrive on Osmosis via the Axelar bridge. Osmosis governance decides how to incentivize liquidity pools containing these assets. In the past two months we have seen incentives pass for wMATIC, wBNB, and wAVAX.
Task: Examine the impact of “bootstrapping” proposals on Axelar bridge volumes and fees paid. Did they sufficiently incentivize users to transfer external assets into Osmosis via Axelar’s bridge, or were the assets deposited into the respective pools already on Osmosis. Analyze the results in aggregate and by asset.
Goal: Identify if Axelar should work with Osmosis to incentivize more wrapped assets, in order to increase volume over Satellite and Squid.
Analyzed Topics:
- Bootstrapping Incentives Impact on wMATIC Bridges
- Bootstrapping Incentives Impact on wAVAX Bridges
- Bootstrapping Incentives Impact on wBNB Bridges
- wAssets Bridge Activity Over Time
- Pool #789 (OSMO/wMATIC) & Pool #899 (OSMO/wAVAX) & Pool #840 (OSMO/wBNB) Analysis
Introduction🚩
What is wMATIC?
wMatic (also known as Wrapped Matic) is what is used to pay for the NFT is used to pay for the transaction fees (gas fees). *Matic is the token you should purchase first because you'll need this to pay for actions on the Polygon network.
What is wAVAX?
WAVAX or Wrapped AVAX is an ERC-20 compatible wrapper contract around the AVAX token. On Avalanche's C-Chain, AVAX is treated just like standard ETH is on Ethereum. This means that AVAX lacks the standardized interfaces that make ERC-20 tokens so interchangeable.
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What is wBNB?
wBNB is “wrapped BNB”. BEP20 is a standard allowing any tokens on Binance Smart Chain to be used by other applications: from wallets to decentralized exchanges in a consistent way. wBNB follows BEP20 standard except that there is no owner.
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Method⚡
In this dashboard, i analyzed bridge activity of wMATIC, wAVAX and wBNB from Axelar to Osmosis before and after their bootstrapping liquidity incentives proposals to see how they performed after that events over time and also what happened to their pools.
At the end of the dashboard i analyzed all wAssets together and compared them to each other to see which of them are the most popular ones to bridge among bridgers on Axelar.
I used parameters for Dates and you can change each part of analysis dates if you want to see your desirable timeframe for analyzed wAssets.
Date_wMATIC field is for wMATIC, Date_wAVAX is for wAVAX and Date_wBNB is for wBNB analysis and before you can use that fields, you should log in to flipside first.
For gathering the data to do my analysis, i used ==Osmosis.core== database provided by Flipsidecrpypto and mainly used osmosis.core.fact_transfers table and filtered Axelar bridgers and their bridge activity with Sender like ‘axelar%‘ and Osmosis as the receiver with receiver like ‘osmo%‘
Findings👀
- WMATIC Bootstrapping liquidity incentives proposal which was #386 proposal started to vote on December 14th 2022 and the voting ended after 5 days on December 19th. I analyzed wMATIC bridges activity from Axelar to OSMO and divided the charts before and after the proposal end date on December 19th.
- According to the charts above, we can clearly see that when this proposal got passed on December 19th, the charts experienced huge increases in bridge activity, number of bridges almost got tripled and bridge volume got doubled after that day, paid fees increased massively and cumulative volume rised with a sharp upward trend.
- Overall charts are confirming my thoughts with showing a huge difference between before and after the proposal in terms of wMATIC bridge activity. Over 700 number of bridges caused over 500K volume in $MATIC and a total amount of almost 1.4 fees.
Findings👀
- wAVAX bootstrapping liquidity incentives proposal which was #410, started to vote on January 25th and closed 5 days after on January 30th. after the proposal got passed, wAVAX bridge activity saw a massive increase and recorded the highest bridge activity on January 31th with 22 bridges and 1.7K volume in total.
- After the proposal, wAVAX recorded approximately 8K more bridge volume than before the proposal with over 100 number of bridges and over 0.2 paid fees in total. Before wAVAX bootstrapping there were almost 50 number of bridges which recorded less than 2K volume together.
Findings👀
- When proposal #360 which was for wBNB bootstrapping got passed on November 14th after 5 days of voting, like previous wAssets that i analyzed earlier, its bridge activity increased massively and recently on February 2023, after 3 months, its activity rised again and recorded some huge statistics in terms of number of bridges and bridge Fees.
- Overall charts are showing a huge difference for before and after the proposal #360 where we can see that after the proposal over 2.5K volume recorded and it was 2K more than before it.
- A total of over 1.4K bridges caused over 2.5 paid fees in $wBNB over time since September 2022.
Conclusion💡
- From what we saw earlier in this analysis, we can conclude that Bootstrapping liquidity incentives proposal effects massively on the asset bridge activity and after these proposals, the wAssets that i analyzed recorded much more activity from Axelar to Osmosis over time.
- The most popular wAsset among all of them is wETH. wBNB is leading others which ones got passed on incentivized in past few months followed by wMATIC in the second place and wAVAX in the last.
- After their proposal got passed, Besides bridge activity hype, a hype got generated on their liquidity pools which i analyzed their pools activity too and we saw that number of daily LPs and LP volume increased significantly right after the proposal voting ended.
Findings👀
- In this section, i showed all wAssets and the 3 wAssets that i analyzed earlier in total to see how they performed on Bridges on a monthly basis.
- Among all wAssets on Osmosis and Axelar, wETH recorded higher volume and higher number of bridges than others. This token has been recorded over 40M bridged volume in USD from Axelar to Osmosis over time followed by wBNB and wMATIC in the second and third place respectively.
- Between these 3 wAssets that i analyzed earlier and got proposed for bootstrapping liquidity, wBNB has performed better than others and recorded higher volume. This token as i said was the most popular one among bridgers after wETH and its highest bridged volume happened on November 2022 with 366K bridged $wBNB over time.
- wAssets bridge activity on Axelar saw a slight increase after start of new year and most of them belong to wETH and wBNB.
Findings👀
- In this section i analyzed wAssets pools which i analyzed their assets earlier on a daily basis to see their pools reacted to this event.
- We can clearly see on all charts that after the proposal, they saw a huge increase in their activity such as number of daily LPs and LP Volume, However it was a short hype and they got back to their normal routine after a couple of weeks.