Providing Liquidity on Osmosis

• Liquidity providers can add liquidity to a pool and earn the pool’s swap fees (determined by the pool owner, usually around 0.3%) and receive LP tokens, which can be bonded for durations of 1 day, 7 days, and 14 days.
• Osmosis makes it possible for other projects to add incentive mechanisms to pools.
• For example, if the Cosmos Hub Community Pool wanted to incentivize liquidity for an ATOM-stablecoin pair, they could distribute ATOM rewards using the Osmosis built-in incentive module.
• These incentives aim to encourage long-term liquidity, not a short-term mercenary farmer model, where yield farmers move from pool to pool, seeking the best yield.
• In practice, a project could provide higher incentives for LPs who time lock their LP tokens for more extended periods, decreasing liquidity volatility.

How to Use Osmosis

• There are a few ways to use Osmosis, and it’s best to follow the money.

  There are three categories of fees on Osmosis:

• Anyone who transacts on the chain will pay transaction fees.

• These fees are variable and based on the storage and computation costs, and the minimum gas cost proposed.

• These fees are distributed to OSMO stakers and validator operators.

• Anyone who swaps assets on the DEX will pay swap fees, which are determined by each liquidity pool’s parameters and trade size.

• These fees are distributed pro-rata to that pool’s liquidity providers.

• Liquidity providers who pull their liquidity out of a pool will pay exit fees.

• The LP shares are then burned, and the value is distributed to the remaining liquidity providers.

• So, anyone can use the Osmosis DEX functionality to swap IBC-compatible tokens like ATOM, ION, AKT, LUNA, and other compatible chains like CRO.

• Text Here

What Is OSMO

• OSMO is the native utility and governance token for Osmosis that facilitates liquidity mining reward allocation and the base network swap fee. 
• Superfluid Staking, the unique feature of Osmosis, makes it possible for OSMO to be used both for staking and liquidity simultaneously, letting liquidity providers or stakers earn rewards from providing liquidity and staking.
• As a governance token, OSMO can be used to vote on protocol upgrades, allocate liquidity mining rewards for specific liquidity pools, and set the base network swap fee.

What is Osmosis?

• Osmosis is a cross-chain Automated Market Maker (AMM) protocol designed with the Cosmos SDK that enables developers to create, build, and deploy their own customized AMMs.
• Osmosis is one of the first AMM Decentralized Exchanges (DEXs) based on Cosmos, an “Internet of Blockchains” network where developers can build interoperable DApps.
• It specializes in the InterchainDeFi movement (Tendermint-based blockchains) in the Cosmos ecosystem, accounting for roughly 40% of the total inter-blockchain transfers on Cosmos. Osmosis is inspired by Balancer, Uniswap, and Curve Finance, and IBC compatible blockchains (such as Cosmos, Regen, Akash, etc.) can be seamlessly swapped on Osmosis, with fees generally under $1.00.

source

I thank alik110 for inspiration from her dashboard codes

Image of How to Use Osmosis and some definitions

what is osmosis

what is osmo

Providing Liquidity on Osmosis

Definition of Providing Liquidity on Osmosis

Introduction

• Our goal of this dashboard: Comparison of active and hyperactive users of osmosis ecosystem
• In terms of swap and swapper, lp and lpers and input and output transfers to the osmosis ecosystem

Why Do You Need Osmosis

• The customizability of liquidity pools, self-governing liquidity pools, and AMM as serviced infrastructure are features that make Osmosis a valuable investment.
• Most major AMMs limit the adjustable parameters of liquidity pools.
• Uniswap, for example, only enables the creation of a pool with two tokens of equal ratio with the swap fee of 0.3%, making swapping easy for users with little or no prior knowledge in market making.
• However, as the DeFi market expands, the necessity for liquidity pools that react to market conditions becomes obvious.
• The optimal swap fee for an AMM trade is determined by various factors, including block times, slippage, transaction fees, market volatility, etc.
• There is no one-size-fits-all solution, as the mix of blockchain protocol features, liquidity pool tokens, market circumstances, etc., can modify the optimal approach for the liquidity providers and market makers.
• Tools provided by Osmosis enable market participants to self-identify opportunities and respond by modifying the various parameters.
• Rather than establishing a centrally planned “most acceptable compromise” value, an ideal balance between fee and liquidity can be obtained through autonomous experiments and iterations.
• This broadens the market for AMMs and bonding curves beyond simple token swaps since the constraint of liquidity pool customizability may have been a barrier for more experimental AMM use cases.
• The pool self-governance feature of Osmosis allows a diverse spectrum of liquidity pools with risk tolerance and strategies to evolve.
• The liquidity pool shares are not only used to calculate the fractional ownership of a liquidity pool but also the right to participate in the strategic decision-making of the liquidity pool.
• The idea of an ‘AMM as a serviced infrastructure’ provides the ability for the creator of the pool to simply define the bonding curve value function and reuse the majority of the key AMM infrastructure.
• It enables to provide of a highly efficient and accessible AMM for the majority of decentralized financial instruments.

Methodology

• Comparison of active and hyperactive users of osmosis ecosystem In terms of swap and swapper, lp and lpers and input and output transfers to the osmosis ecosystem

• Using tables:

  osmosis.core.fact_transactions
  

  osmosis.core.fact_swaps
  

  osmosis.core.fact_liquidity_provider_actions
  

  osmosis.core.fact_transfers
  

• In this section, we will examine the graphs of Osmosis HyperActive Users and Top 10 Daily Active Users And Number of Active Days.
• According to statistics, there are 82.5k active users on Osmosis who have completed their transactions on 5 or more days per week.
• osmo1tew2mp3racvkcye5qj5vyyqf22sgr6zefwcaln = 476
• osmo18n3vlcthxv5s2s4zgjdrjr5a6lw9e7tm09jk8t = 474
• osmo12uk22nzee0hgahzttujcdce78ax627as04tcas = 472
• osmo1mxlr7up99ukuwj3frr56qwamqqx7p0grwgj85r = 470
• osmo1e60g9rekrcl9x4ghsz208m46zlfc9kl74g586d = 470
• There are 5 top users who, in addition to being Top 5Daily Active Users, are also Hyper Active Users, which can also be seen in the charts above.
• In the above graphs, the top users are very close to each other and the balance is well defined in the above graphs
• The Osmosis project is still under development and for now only its Minimum Viable Product (MVP) is available to users.
• It is expected that in the next updates, the ability to interact with other blockchains outside the Cosmas ecosystem will be added to the Osmosis automatic market maker.
• For this reason, a bright and favorable future is predicted for users.

• In this section, we check user activity in terms of lp and swap As the graphs on the left show:
• The first part of the lp Total number of users who have done lp = 58.94k Total number of lp done = 3.50m Number of users who have only done lp = 210
• The second part of the swap Total number of users who have done swap = 72.01k Total number of swaps done = 15.08m The number of users who have only done swap = 13269
• The third part of lp and swap Total number of users who have done lp and swap = 58744
• Result
• Most users tend to do lp and swap, which according to the available data includes 81.3% of active users.
• 18.4% of users want to do only swap 0.291% of users tend to do only lp which is very small.
• The total number of swaps performed is almost 5 times compared to the performed lp, which shows the desire of users to swap more.

• In this section we examine Hyper Active Users in terms of lp and swap As the graphs on the left show:
• The first part of the lp Total number of users who have done lp = 24 Total lp done = 13.625k Number of users who have only done lp = 0
• The second part of the swap Total number of users who have done swap = 24 Total number of swaps done = 41.474m Number of users who have only done swap = 0
• The third part of lp and swap Total number of users who have done lp and swap = 24
• Result
• All Hyper Active Users tend to perform lp and swap, which according to the available data includes 100% of Hyper Active Users.
• The total number of swaps performed is almost 3 times compared to the performed lp, which shows the greater willingness of Hyper Active Users to swap.

• In this section, we want to check active users on a weekly basis from June 2021 to Oct 2022 in terms of swap, lp, swapper, and lpers.
• At first glance, it is clear that the number of swaps and swappers is more than lp and lpers Also, the number of swaps compared to lps is more than swappers compared to lpers The highest number of swaps and swappers and lp and lpers was from Jan 2022 to May 2022.
• In the Cumulative Number of Swaps and LPs chart, the number of swaps = 13.741m and lp=3.32m, which is almost 4 times the number of swaps than LPs, and it shows the high preference of active users for swaps compared to LPs.
• The trend of the charts is upward from June 2021 to the end of March 2022, and from the beginning of April to the middle of June, it takes a downward trend, and from then on, it follows a steady trend.

• In this section, we want to check Hyper Active Users on a weekly basis from June 2021 to Oct 2022 in terms of swap, lp, swapper, and lpers.
• At first glance, it is clear that the number of swaps and swappers is more than lp and lpers. swaps compared to lps are more than swappers compared to lpers.
• The highest number of swaps and swappers and lps and lpers was from Jan 2022 to May 2022. In the Cumulative Number of Swaps and LPs chart, the number of swaps = 41.47k and lp=13.62k, which is almost 3 times the number of swaps than lps, and shows the high preference of Hyper Active Users for swaps compared to lps.
• The chart trend is upward from June 2021 to the end of Jan 2022, and from the beginning of February to the end of April, it takes a downward trend, and from then on, it goes through an increasing and steady trend for swap and swapper, and a steady downward trend for lp and lpers. he does

• in this part We check the average daily number of exchanges and LPs by active users and the average number of exchanges and LPs per active user. As the diagram on the left shows:

  The first part of the lp Daily average total number of users who have done lp = 3846.6k Average daily total number of lp done = 7234.6 Average number of lp per active user = 59.39

  The second part of the exchange Daily average of total number of users who have exchanged = 7885.7 Daily average total number of swaps done = 31.16k Average number of swaps per active user = 209.4

  Result

• The daily average of the total number of swaps performed is almost 4 times more compared to the performed lp, which indicates the desire of users to swap more.

• in this part Average Number of Swaps and LP Per Active User Average Daily Number of Swaps & Swappers and LPs & LPers by HyperActive Users We check As the diagram on the left shows:

  The first part of the lp Daily average total number of users who have done lp = 11.19 Average daily total number of lp done = 28.15 The average number of lp per active user = 567.7

  The second part of the exchange Daily average number of total users who made swaps = 18.22 Daily average number of total swaps made = 85.69 Average number of swaps per active user = 1728

  Result

• The daily average number of total swaps compared to lp is more than 3 times, which shows the desire of users to swap more.

• in this part

• Distribution of Active Users By Their Total Number of Swaps and LP Actions Distribution of HyperActive Users By Their Total Number of Swaps and LP Actions We will check

  Active Users: The highest lp in the range of 2-10, the lowest lp in the range of more than 1000 The highest swap in the range of 101-250, the lowest swap in the range of once

  hyper active users: The highest lp in the range of 501 - 1000, the lowest lp in the range of 2-10 The highest swap is in the range of more than 1000, the lowest swap is in the range of 251-500, the rest of the ranges are not in the chart due to their insignificance.

  Result

• Most active users have done only 2-10 LP actions while most of them have done 101-250 Swap transactions which is much more! For Hyper Active users, we see that most of them have done 501 - 1000 LP actions while this number is more than 1000 times for trading activity! Hyperactive users have done more swap and lp than active users.

• In this section, we check the transfers of active users
• As shown in the chart, from July 2021 to late June 2022, outgoing transfers by active users of the osmosis ecosystem are more than incoming, but from this date onward, the opposite has happened.
• The highest amount of output is also due to the month of January until the end of May 2022, and from this date onwards, the highest amount of input has occurred.
• In general, according to the graph, 53.7% of transfers, which is equal to 4244146 numbers, were outgoing by active users, and 46.3% of transfers, which is equal to 3662118 numbers, were incoming.

• In this section, we examine the transfers of hyperactive users
• In this chart, from July 2021 to the middle of December 2021, the amount of outgoing transfers by hyperactive users was more than the incoming, but as 2022 approaches and also the entire year of 2022, these incoming transfers are more than outgoing and It has been stable
• The highest amount of incoming transfers is from January 2022 to the end of May 2022.
• The highest amount of outgoing transfers is related to before this date
• In general, according to the graph, 54.6% of transfers, which is equal to 17,995 numbers, were input by hyperactive users, and 45.4% of transfers, which is equal to 14,938 numbers, were outgoing.

• In this section, the daily average of transfers by active users
• We examine the average number of transfers by active users, broken down by type of transfer
• In the graphs on the left, the average number of daily and total outgoing transfers by active users of the osmosis ecosystem are more than the incoming transfers, and the two graphs on the left show this issue.

• In this section, we examine the average daily and total transfers of hyperactive users
• As shown in the graphs on the left, the average number of daily and total incoming transfers by hyperactive users of the osmosis ecosystem is higher than the average number of outgoing transfers.

• In the charts above, Top 10 Origins of Tokens Transfers Into Osmosis By Active Users and Top 10 Origins of Tokens Transfers Into Osmosis By HyperActive Users

• You can see that we have stated the top 3 transfer tokens from each of the charts above with the percentage of the chart as follows and we see that Top 3 Origins of Tokens Transfers Into Osmosis By Active Users It includes 70% of the chart and Top 3 Origins of Tokens Transfers Into Osmosis By HyperActive Users It covers 42% of the chart

  \

• Top 3 Origins of Tokens Transfers Into Osmosis By Active Users Top 3 Origins of Tokens Transfers Into Osmosis By HyperActive Users

• bostrom1rl7lksuzayz5j0u0p35ezrw95czp3gyt4emcwf = 101994 _ 56.1% juno15cxzysdx8aavudyr8phtreq2uw6k5j3ghkw5r0 =795 _ 21.9%

• axelar19xj4ncc6h6y5ahpfqtspdx75y3dkrxj3zpah9k = 13793 _ 7.59% chihuahua1gxr53f9jx5cxn3dmkzr2eq93g05yey3054psw0 = 388 - 10.7%

• juno1yz54ncxj9csp7un3xled03q6thrrhy9cuzxzn7 = 12757 _ 7.02% sent1m0zndpgewmsyeht79kcnm7993aa020s77lemgr = 380 - 10.5%

  \

• In the charts above Top 10 Destinations of Tokens Transfers From Osmosis By Active Users and Top 10 Destinations of Tokens Transfers From Osmosis By HyperActive Users

• You can see that we have expressed the top 3 transfer tokens from each of the charts above with the percentage of the chart as follows and we see that Top 3 Destinations of Tokens Transfers From Osmosis By Active Users It includes 68% of the chart and Top 3 Destinations of Tokens Transfers From Osmosis By HyperActive Users It includes 41.2% of the chart

• Top 3 Destinations of Tokens Transfers From Osmosis By Active Users Top 3 Destinations of Tokens Transfers From Osmosis By HyperActive Users

• bostrom1rl7lksuzayz5j0u0p35ezrw95czp3gyt4emcwf = 90464 _ 42.8% cosmos1m0zndpgewmsyeht79kcnm7993aa020s79y0zvv = 489 _ 17.5%

• cosmos15vdjje8009ly9rudapxjcht5h9vshc7hx2ww5k = 32031 _ 15.1% cosmos1rh793h4h9v608t2ttv3vvawqs3u6tvuf5h3xrz = 363 _ 13%

• bostrom1zya69094e6txwpz45weuzkyp55z3hz7c5d6ups = 20688 _ 9.78% juno1awlntjfrmlq07kwr5ukwfvez46gagts998c0n7 = 298 _ 10.7%

• In the charts on the left, see an increase
• We measure Total OSMO balance for active users as well as hyperactive users over time, but Average OSMO Balance initially increased, but as 2022 approaches, both active users and hyperactive users have experienced a sharp decrease.
• But with the passage of time, Average OSMO Balance in hyperactive users has gone through an increasing trend again, but in active users, it has continued its downward trend. It should be seen in the future, will this trend continue to decrease in active users?

Conclusion

• According to statistics, there are 82.5k active users on Osmosis who have completed their transactions on 5 or more days per week.

• osmo1tew2mp3racvkcye5qj5vyyqf22sgr6zefwcaln = 476

• osmo18n3vlcthxv5s2s4zgjdrjr5a6lw9e7tm09jk8t = 474

• osmo12uk22nzee0hgahzttujcdce78ax627as04tcas = 472

• osmo1mxlr7up99ukuwj3frr56qwamqqx7p0grwgj85r = 470

• osmo1e60g9rekrcl9x4ghsz208m46zlfc9kl74g586d = 470

• There are 5 top users who, in addition to being Top 5Daily Active Users, are also Hyper Active Users, which can also be seen in the charts above.

  \

• Most users tend to do lp and swap, which according to the available data includes 81.3% of active users. 18.4% of users want to do only swap 0.291% of users tend to do only lp which is very small. The total number of swaps performed is almost 5 times compared to the performed lp, which shows the desire of users to swap more

• \

• All Hyper Active Users tend to perform lp and swap, which according to the available data includes 100% of Hyper Active Users. The total number of swaps performed is almost 3 times compared to the performed lp, which shows the greater willingness of Hyper Active Users to swap.

  \

• The daily average of the total number of swaps performed is almost 4 times more compared to the performed lp, which indicates the desire of users to swap more.

  \

• The daily average number of total swaps compared to lp is more than 3 times, which shows the desire of users to swap more.

  \

• Most active users have done only 2-10 LP actions while most of them have done 101-250 Swap transactions which is much more! For Hyper Active users, we see that most of them have done 501 - 1000 LP actions while this number is more than 1000 times for trading activity! Hyperactive users have done more swap and lp than active users.

The number of active users and the top active and hyperactive users

Checking active users and hyperactive users in the field of swap and lp

Investigating active users and hyperactive users in the field of input and output transfers of the osmosis ecosystem

Top destinations for transferring code to and from the Osmosis ecosystem

OSMO Balance of Active and HyperActive Users