Optimistic Bears (Redux)
Let's analyze the optimism showing the metrics as the markets turn turbulent.
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🔴 What is Optimism?
Optimism is a layer 2 chain, meaning it functions on top of the Ethereum mainnet (layer 1). Transactions take place on Optimism, but the data about transactions get posted to mainnet where they are validated. Synthetix, a derivatives liquidity protocol, is the largest protocol on Optimism, with a total value locked (TVL) of $125 million. Uniswap, a decentralized exchange (DEX), is the second most popular protocol on the chain. As of this writing, there are 35 protocols on Optimism with at least $1,000 locked into their smart contracts.
🔴 How Does Optimism Work?
Optimism uses a technology called rollups, specifically Optimistic rollups. They’re called rollups because they roll up (or bundle) the data about hundreds of transactions – non-fungible token (NFT) mints, token swaps … any transaction! – into a single transaction on the Ethereum mainnet (layer 1). When so many transactions are rolled up into a single transaction, the blockchain transaction, or "gas," fee required to pay comes down to only one transaction, conveniently distributed across everyone involved
They’re called Optimistic rollups because transactions are assumed to be valid until they are proven false, or in other words, innocent until proven guilty. There’s a time window during which potentially invalid transactions can be challenged by submitting a “fraud-proof” and running the transactions’ computations with reference to available state data. Optimism reimburses the gas needed to run the computation of the fraud-proof.
🐻What is Bear Market?
A bear market is defined by a prolonged drop in investment prices — generally, a bear market happens when a broad market index falls by 20% or more from its most recent high. There can be bear markets for a market as a whole, such as in the Dow Jones Industrial Average, as well as for individual stocks.
While 20% is the threshold, bear markets often plummet much deeper than that over a sustained period, not all at once. Although the market has a few occasional “relief rallies,” the general trend is downward. Eventually, investors begin to find stocks attractively priced and start buying, officially ending the bear market.
Bear markets are characterized by investors’ pessimism and low confidence. During a bear market, investors often seem to ignore any good news and continue selling quickly, pushing prices even lower.
While investors might be bearish on an individual stock, that sentiment may not affect the market as a whole. But when the market turns bearish, almost all stocks within it begin to decline, even if individually they’re reporting good news and growing earnings.
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Introduction
Optimism is a layer 2 scaling solution for Ethereum. It helps reduce the transaction fee and transaction duration on the Ethereum blockchain. Optimism uses rollups to process the transactions in batches, which can reduce gas fees and network congestion. Other than the beauty of low gas fees and fast transaction process, it leverages the high security of the Ethereum blockchain as well.
July is reported became the second worst month on the cryptocurrency market this year by spot volume after June . Let’s see what important things happened in July?
🧠 Methodology
⭐ To query optimism data, use these tables as optimism.core.fact_event_logs, optimism.core.dim_contracts, optimism.core.fact_transactions, optimism.core.dim_labels, optimism.core.fact_hourly_token_prices, optimism.suwashi.ez_swaps_ps.swaps.swaps , ethereum.core.ez_eth_transfers, I used.
The time frame includes July 2022.
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FINDINGS
✔ In July, Optimism processed a total of 3.42 million transactions. During the month, as you can see, the increase in the number of daily transactions occurred at the end of the month, especially after July 26, 2022, reaching the highest daily transaction record on July 29, 2022. Then on July 29, 2022, it began to slow down on July 31, 2022.
✔ With the increase in daily transactions, the failure rate of the transaction was slightly increased as well, with the average failure rate at around 8% to 14%. Throughout the month, the Optimism network has a failure rate of less than 10% on average.
✔In addition, the total number of unique addresses per day has reached almost 400 thousand. Similar to the trend for the number of transactions per day, the value increased exponentially to 65,000 unique addresses per day on July 27, 2022, then dropped to 21,000 per day on July 31, 2022.
✔ During the month of July, users spent a total of $13.79k in transaction fees. As we can see, the big bars are observed at the end of the month according to the graph of total ETH gas fees per day.
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FINDINGS
✔By comparing the number of inflow transaction and outflow transaction, we can see that we outflow transactions was higher than the inflow before 26 July 2022, yet, after 26 July 2022, the inflow transaction was higher than the outflow with a total of 342 highest on 29 July 2022.
✔The trend of the daily number of unique users was similar to the daily number of transactions. The inflow of users was more than the outflow after 26 July 2022 and less than the outflow before 26 July 2022.
✔Taking a closer look at the inflow and outflow volume in USD, we can see that by the end of July, the total inflow volume is much higher than the outflow volume, recorded at $74M on Across, $26M on Native bridge and $3.9M on HOP. Meanwhile, the outflow volume on Across is $4.8M, $6.5M on Native bridge, and $0.056M on HOP.
✔During the first half of July, the total inflow volume was almost on par with the outflow volume. However, during the second half of July, the inflow volume was exponentially increasing, outpacing the outflow volume. By referring to the Ethereum Price Chart on the top section of the dashboard, you can see that the Ethereum price went up during the second half of July.

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FINDINGS
✔ Comparing the number of check-in and check-out transactions, we see that our pre-July 26, 2022 sign-in process is higher than the entry, but after July 26, 2022, the sign-in is higher than the exit, with a total of 342 high. 29 July 2022.
✔ The trend of the number of unique users per day was similar to the number of transactions per day. Users' login was more than after July 26, 2022 and less than before July 26, 2022.
✔ In the first half of July, total entry volume was almost at the same level as exit volume. However, in the second half of July, inflow volume increased exponentially, outpacing output volume. By looking at the Ethereum Price Chart at the top of the dashboard, you can see that the price of Ethereum rose in the second half of July.
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FINDINGS
✔The highest NFT sales were recorded as 2098, 2045 and 1681 sales.
✔The increase in the OP price increased the number of NFT sales.
✔The highest average selling price was $35.99 - 244 sales, $34.47 - 201 sales and $29.5 - 15 sales values were recorded.
✔OP price chart up to July 10 has no significant correlation with NFT sales volume. But as of July 10, there is a correlation between OP price and NFT sales volume.
✔There is no significant relationship between NFT sales volume and average selling price.
✔No NFT sales were recorded on July 2, 2022.


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