Try Quests to earn cryptoSuperFluid Validating
Osmosis (OSMO): A DEX for the Cosmos Ecosystem
Osmosis is a DEX protocol, which means it uses smart contracts to determine the price of digital assets, to produce liquidity via a peer-to-peer (P2P) methodology, and to exact trades between users. This approach to an exchange platform is known as an AMM — a DEX protocol that prices crypto assets in liquidity pools. Contributing tokens to these pools helps foster decentralized liquidity, which is then used to facilitate trades on the exchange. Participating as a liquidity provider (LP) can earn you both trading fees and newly minted LP tokens as incentives for participation.
A key innovation within the Osmosis protocol structure is superfluid staking, which allows users to both stake tokens while simultaneously using them to provide assets to a liquidity pool. This means Osmosis users are rewarded for helping secure the blockchain while staking, and receive reward fees associated with liquidity pool transactions.
What is Superfluid Staking?
Superfluid Staking is the biggest advance in Proof of Stake since validator slashing. It was developed on Osmosis and, for now, exists only here. It is a method of staking the OSMO tokens that underlie your LP (liquidity provider) positions.
When you provide liquidity in an OSMO liquidity pool like ATOM/OSMO, you provide 50% ATOM and 50% OSMO. When you bond/lock that LP position, you earn fees and liquidity mining incentives for helping to facilitate trading in the pool. Before superfluid staking, that was the end of it. Your OSMO could not otherwise be re-used. But now, the locked OSMO can be tracked by Osmosis and used to help secure the chain.
Superfluid staking can also be thought of as reverse liquid staking. Instead of creating synthetic representations of staked assets (as with regular liquid staking), superfluid staking allows staking tokens already being used in DeFi to be staked.
What is Slashing?
Slashing works by gathering all accounts who were superfluidly staking and delegated to the violating validator and slashing their underlying lock collateral. The amount of tokens to slash are first calculated then removed from the underlying and synthetic lock. Therefore, it is important to select a reputable or reliable validator as to minimize slashing risks on your tokens.
Questions:
There are 16 SuperFluid Staking pools currently available on Osmosis (1, 678, 704, 712, 674, 722, 9, 604, 497, 812, 584, 3, 481, 42, 463, 15).
- What impact would a slashing event have on the OSMO liquidity of these pools?
- Analyze the distribution of superfluid-staked OSMO across these pools.
- Which validators have the most SFS OSMO in total, and per pool?
Methodology:
In this dashboard, we are looking at superfluid staking pools. To find the amount of deposit to or withdraw from these pools, I used Ali3N queries.
Since the price of LP tokens on each pool is different, we had to calculate volume in $USD. For this, we have used osmosis.core.dim_prices (joining with osmosis.core.dim_labels) table.
Moreover, The main tables that I have used for this analysis are osmosis.core.fact_liquidity_provider_actions & osmosis.core.fact_swaps by filtering the pool_ids to the superfluid staking pools (1, 678, 704, 712, 674, 722, 9, 604, 497, 812, 584, 3, 481, 42, 463 and 15.). I used pool name as follows in this dashboard:
-
Pool ID #1 = ATOM / OSMO
-
Pool ID #678 = USDC / OSMO
-
Pool ID #704 = WETH / OSMO
-
Pool ID #712 = WBTC / OSMO
-
Pool ID #674 = DAI / OSMO
-
Pool ID #722 = EVMOS / OSMO
-
Pool ID #9 = CRO / OSMO
-
Pool ID #604 = STARS / OSMO
-
Pool ID #497 = JUNO / OSMO
-
Pool ID #812 = AXL / OSMO
-
Pool ID #584 = SCRT / OSMO
-
Pool ID #3 = AKT / OSMO
-
Pool ID #481 = EEUR / OSMO
-
Pool ID #42 = REGEN / OSMO
-
Pool ID #463 = NGM / OSMO
-
Pool ID #15 = XPRT / OSMO
\
The transactions count chart is different from the volume chart. In this chart, there is a period that the number of deposit transactions is more than others times. Since the beginning of 2022, the number of transactions increased and continued until the end of Apr. Before and after this period the number of deposit transactions is the same.
In addition, the most popular pool before mid-Jun was ATOM / OSMO pool but after that, the story changed and this title went to EVMOS / OSMO pool.
The first look told us that the weekly amount which was deposited to superfluid staking pools decreased since mid-Jun 2022. The suddenly dropped decreased total volume from around $25M to less than $2M.
Before Jun 2022, most of the amount deposited to superfluid staking pools went into ATOM / OSMO pool but after that, the most amounts went into USDC / OSMO pool. You could see this in sharing chart.
Exactly the same decrease that we saw in the charts related to the deposit amount can be seen in the charts of the withdrawal amount. Almost from the middle of June, the withdrawal amount decreased sharply.
It can be said that almost all the time, the Atom / OSMO pool had the largest amount of withdrawals, although there are exceptions, for example, from October 3rd to 7th, we had more than 12 million dollars in withdrawals from the USDC/OSMO pool.
In addition, comparing deposit and withdraw amounts told us users prefer deposit more than withdraw.
The transactions count chart is different from the volume chart. In this chart, there is a period that the number of withdrawal transactions is more than others times. Since the beginning of 2022, the number of transactions increased and continued until the end of May. Before and after this period the number of withdrawal transactions is the same.
In addition, the most popular pool is ATOM / OSMO pool over time.
These charts show the total volume in USD for each validator. Based on my analysis, the most powerful validator is ==Cosmostation== with ~$90 M. The next one are ==Shapeshift DAO and AUDIT.one== with ~55$M and $44M respectively.
In addition, the left chart shows the top validators per pool.
As you can see:
- Cosmostation is between the top 10 of 13 out of 16 superfluid staking pools.
- Shapeshift DAO is between the top 10 of 4 out of 16 superfuild staking pools.
- AUDIT.one is between the top 10 of 4 out of 16 superfuild staking pools.
Conclusion:
- Because of the slashing events, it is important to select a reputable or reliable validator to minimize slashing risks on your tokens.
- The weekly amount deposited to superfluid staking pools decreased since mid-Jun 2022. The suddenly dropped decreased total volume from around $25M to less than $2M. Most of the amount deposited to superfluid staking pools went into ATOM / OSMO pool at first but after that, the most amounts went into USDC / OSMO pool.
- Almost from the middle of June, the withdrawal amount decreased sharply too. It can be said that almost all the time, the Atom / OSMO pool had the largest amount of withdrawals.
- Comparing deposit and withdraw amounts told us users prefer deposit more than withdraw.
- the most powerful validator is ==Cosmostation== with ~$90 M. The next one are ==Shapeshift DAO and AUDIT.one== with ~55$M and $44M respectively.
The above charts show the NetFlow (Deposit amount minus Withdraw amount). As you can see, the NetFlow was negative till end of Feb. Anyway the total NetFlow told us people deposit more than withdraw from pools.
The popular pool is ATOM / OSMO and next one are USDC / OSMO and JUNO / OSMO respectively.
Slashing Event:
==Superfluid Staking has some risks for users.== For example, token holders will not be able to use their tokens engaged in Superfluid Staking to vote and will effectively give up their governance power. Superfluid Staked OSMO can only be delegated to one validator, and will inherit the votes of that validator with no ability to override the validator’s vote.
Staked tokens are at risk of slashing if the validator they are staked to does not operate as expected on the network. While slashing events are rare, it is important to know how slashing will impact Superfluid Staked assets. Even though only a portion of the LP token’s value is earning staking rewards, the entirety of its value is subject to slashing penalties. If the validator that you have delegated to is slashed 5% for double-signing, the entirety of your Superfluid Staked LP tokens will be slashed by 5% and sent to the community pool.