Overview

Methodology

Osmosis is a multi-chain DEX specifically built to function with other blockchains in the Cosmos ecosystem. Communication with these other blockchains is achieved via its Inter-Blockchain Communication protocol (IBC) [1].

MATIC, is one of the top cryptocurrencies on the market. In fact, it is currently the rank 10 cryptocurrency by marketcap with a valuation of around $8.2 Billion, 16 times higher than Osmosis. WMATIC is the wrapped version of this able to be used across Polygon Network DeFi.

The majority of trade volume happens on alternative decentralised exchanges for WMATIC and centralised exchanges for MATIC, not on Osmosis.

For this reason, Osmosis created a proposal as a strategic interest in attracting more liquidity of WMATIC and so will enable it to access a greater proportion of liquidity incentives.

Moreover, after OSMO/WMATIC pool was added, another proposal was carried out at the end of 2022 in which OSMO stakers voice their support for bootstrapping WMATIC liquidity by manually allocating 0.5% of liquidity incentives to the OSMO/WMATIC pool (#789) [2].

This proposal provides initial incentives on the 20th December. Bootstrapping incentives indicate that Osmosis stakers wished to quickly establish functional liquidity of WMATIC to facilitate trading and liquidity flow between Polygon and Osmosis via the Axelar bridge.

The intention of this dashboard is to track the flow of MATIC to Osmosis. Where is this MATIC coming from? Did users remove this MATIC from specific protocols to bridge over to Osmosis? Have this volume transferred changed since incentives were turned on?

\n To answer all of this questions, we are gonna divide the analysis in 4 main approaches:

• MATIC to Osmosis activity before and after incentives
• Type of user acquiring MATIC to Osmosis
• Senders who are transferring MATIC to Osmosis
• Behavior of users who are sending MATIC to Osmosis

In each of these parts, the main metrics to be analyzed are:

• MATIC transfers to Osmosis
• Active senders and receivers
• Volume of MATIC transferred
• Average volume transferred

Part 1: MATIC to Osmosis activity before and after incentives

In this first approach, we can see how in general, it is clear that incentives impacted heavly on the MATIC transfers to Osmosis, not only in the number of transactions but also in the number of receivers and volume transferred. Remember that as we said before, the incentives were applied just after the proposal passed on December 20th 2022.

Even it is not a common trader for Osmosis users, it seems that since the application of the incentives there have been at least 5 transfers of MATIC to Osmosis in a daily basis. As well, the volume seems to be stablished a new low treshold of around 5k tokens.

Part 3: Senders who are transferring MATIC to Osmosis

Regarding the identity of wallets who are sending MATIC to Osmosis, we can see how even some punctual wallets from Kujira, Cosmos and Comdex, the major of the transfers come from Axelar network. In fact, sicne the incentives, the major of them come from there due to it incentivies the transfers using Axelar Sattelite bridge.

The major difference is in the volume of MATIC sent to Osmosis, in which practically 100% comes from Axelar. In fact, it implies more than 98% of the receivers.

Part 4: Behavior of users who are sending MATIC to Osmosis

In this final part, we can see some behavior of Axelar wallets who are sending MATIC tokens to Osmosis. On the one hand, they are not only sending MATIC to Osmosis. On the other hand, they are not sending tokens only on Osmosis.

The main tokens they are sending to other chains are:

• USDC
• ETH
• MATIC

The main chains in which they are sending tokens are:

• Axelar
• Polygon
• Ethereum

It is clear that it seems that the profile of these users is more like a EVM-like user.

The final found we can observe is that from the top tokens being sent from these wallets, there is only one who are receiving more IBC transfers IN than OUT and its MATIC.

Key insights

• It is clear that incentives impacted heavly on the MATIC transfers to Osmosis, not only in the number of transactions but also in the number of receivers and volume transferred.

• Considering all transfers since inception, almost 80% of them have been executed by new Osmosis users while only 20% by old users.

• Regarding the identity of wallets who are sending MATIC to Osmosis, we can see how even some punctual wallets from Kujira, Cosmos and Comdex, the major of the transfers come from Axelar network.

• On the one hand, they are not only sending MATIC to Osmosis. On the other hand, they are not sending tokens only on Osmosis.

• The main tokens they are sending to other chains are USDC, ETH and MATIC.

• The main chains in which they are sending tokens are: Axelar, Polygon and Ethereum.

• It is clear that it seems that the profile of these users is more like a EVM-like user.

• The final found we can observe is that from the top tokens being sent from these wallets, there is only one who are receiving more IBC transfers IN than OUT and its MATIC.

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Part 2: Type of user acquiring MATIC to Osmosis

For this part, please, Take into account that a user have been catalogues as “new” if the transaction has been made a maximum of 30 days after its debut on Osmosis chain.

Looking at the type of users that are being sending MATIC to Osmosis, we can see how in the major of the cases are new users. Considering all transfers since inception, almost 80% of them have been executed by new Osmosis users while only 20% by old users. Something similar occurs with the volume of MATIC transferred to Osmosis. The major of it has been sent since 20th December after the incentives approval and since then, the major of active receivers have been new users.