Introduction

Liquidity providers are allowed to deposit either symmetrically or asymmetrically. By symmetrical deposit, we mean providing equal USD value of 2 assets to a pool. In where users deposit only one of the assets (the other 0 deposit) or the value of two assets are not the same, we have asymmetrical deposit.

User are incentivized to deposit symmetrically. However, asymmetrical deposit is also possible, particularly when the pool is already imbalanced.

This dashboard investigates what drives users to deposit symmetrically or asymmetrically.

Descriptive Analysis

The graph below shows the number of adding liquidity over time. We can see that there is a peak in the end of March in the number of providing liquidity action.

When we look at the amount of liquidity that have been added to the pools we see almost the same trend.

The graphs below show the relative number and amount of adding liquidity to pools over time.

We can see that in terms of the number of adding liquidity Rune-only is always dominant except in the peaks. In terms of amount, symmetric action is dominant.

Explanatory Analysis

Two hypothesis are tested to explain what affect the choice between asymmetric and symmetric deposits.

• The effect of network (blockchain)

• The effect of RUNE price (in USD)

*Note: For the analyses below we focus on the recent active period of THORChain starting from the January 1st, 2022.

The effect of network

The graph below shows the number of adding liquidity per blockchains in 2022.

We can see that In terms of the number BNB and ETH were the most popular chain for adding liquidity in 2022.

When we take into account the variation in chains, we can see that Ethereum and Bitcoin have the lowest relative number of symmetric deposits and highest relative number of RUNE only deposit. Doge, BCH and LTC have the highest number of asset only.

Taking into account the amount of liquidity per chains, we can see that Ethereum while attracts most liquidity, has the least symmetric deposit in terms of USD value.

The effect of RUNE price

Graphs below show how the price of RUNE and the number and amount of deposit have been changed over time in 2022.

As can be seen, the price of RUNE and the number/amount of deposits go up and down hand in hand.

When the data break down into the type of deposit, we can see that in the peak of RUNE price, the RUNE only deposit is at the lowest level and the highest percentage of RUNE only occurred when the RUNE price was at a low level.

The graph below shows the correlation between the daily number of liquidity actions and the daily average of RUNE price. We can see that the higher the price of RUNE is the more likely a symmetric deposit is. Moreover, we can see the negative correlation between the price of RUNE and RUNE only deposits.

Note 1: In the graph below the size of markers represent the daily amount of deposit in USD.

Note 2: The correlation between amount of deposits and the price of RUNE is prone to misinterpretation unless the amount of deposit is normalized by the price of RUNE.

Conclusion

The data shows that in March 2022 deposits in terms of number and amount reached at the highest level in 2022.

We can see that while the number of Rune-only adding liquidity is always dominant except in the peaks, in terms of amount (in USD), symmetric deposit is dominant.

Findings show that chains that users deposits from significantly influence the category of deposits. While, Ethereum and Bitcoin users more frequently deposit Rune only, DOGE, LTC and BCH users most frequently use asset-only deposits.

In terms of amount, Doge users provided most symmetric deposits.

Moreover, the results show that the price of RUNE influences the choice of users in deposits. The higher price of RUNE lead to the less RUNE only deposit and more symmetric deposits.