Number of Users by wallet type

According to the graph we have the following results:

Shrimps , users with less than $100 balance, are about 375K and 85.1% of total users.
Crabs , users with $100 - $1k balance, are about 50K and 11.4% of total users.
Octopuses, users with $1k - $5k balance, are about 10K and 2.33% of total users.

Dolphins, Fishes, Sharks, Whale and Humpback Whale are in the next rank.

Liquidity Provider Wallets

The above charts show that Shrimps do more than half of the liquidity-providing transactions on Osmosis, with about 1.7M transactions followed by Crabs and Octopuses.
Shrimps hold a 76.8% share of the total number of users, followed by Crabs and Octopuses.
However, Humpback Whales account for most of the liquidity volume on Osmosis, with more than $3.7M and 28.3% of total volume, fishes are ranked second, and Octopuses are ranked third.
Because we have observed multiple groups of wallets engaged in providing liquidity on Osmosis, we cannot assume that the liquidity is concentrated and owned by a limited number of whales.

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LP activities vs. TVL of the pools

In this part by calculating the TVL of the most popular pool on Osmosis, ATOM/OSMO, we will try to compare the relation between TVL and the number of transactions and liquidity provider on this pool.
These data show a positive correlation between the activity of the liquidity providers on the ATOM/OSMO pool and its TVL.

As can be seen, before March 2022, both TVL and activity on this pool were increasing, but after May, both TVL and the number of transactions and users began to decline.

Weekly Liquidity Provider Wallets

According to the above weekly data, Shrimps have a more significant proportion than all other user groups in terms of transactions and user count, providing liquidity actions on Osmosis.
On Osmosis pools, however, we can observe a rising percentage of Fish and Octopus supplying liquidity as measured by volume. Also, we can observe an increasing share of Fish and Octopus supplying liquidity as measured by volume. The number of humpback whales and dolphins providing liquidity to Osmosis pools has been steadily increasing in recent weeks, notably after May 2022. As a result, in the recent weeks, humpback whales account for a sizable portion of LPing in Osmosis.
Overall, the Liquidity Providing activity on Osmosis significantly expanded until March 2022. However, from that point on till now, we can observe a relatively decreasing tendency over time.

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Methodology

In this dashboard, we will define different kinds of users based on their balance in USD as follows:

case when usd_balance < 100 then 'Shrimp'

when usd_balance >= 100 and usd_balance < 1000 then 'Crab'

when usd_balance >= 1000 and usd_balance < 5000 then 'Octupus'

when usd_balance >= 1000 and usd_balance < 10000 then 'Fish'

when usd_balance >= 10000 and usd_balance < 100000 then 'Dolphin'

when usd_balance >= 100000 and usd_balance < 1000000 then 'Shark'

when usd_balance >= 1000000 and usd_balance < 10000000 then 'Whale'

when usd_balance >= 10000000 then 'Humpback Whale

We will try to answer the following questions What type of wallets provide liquidity on Osmosis? Is liquidity concentrated and owned by a small number of whales? Or, are there a diverse range of participants in the LP ecosystem? Do LP composition change based on the TVL of the pools themselves? by using the following parameters:

Number of Users by wallet type
Weekly and Total Liquidity Provider Wallets
LP activities vs. TVL of the pools

Introductions

Crypto Whale

A cryptocurrency whale, more commonly called a "crypto whale" or just a "whale," is a cryptocurrency community term that refers to individuals or entities that hold large amounts of cryptocurrency. Whales hold enough cryptocurrency that they have the potential to manipulate currency valuations.

Achieving whale status in the cryptocurrency space is subjective. In most cases, the community seems to agree that a large percentage of the available coins make an account a whale. In general, whales account for more than 10% of the total number of a specific cryptocurrency.

Liquidity Providing

Providing liquidity (called “LPing”) is the process of depositing assets into an AMM pool. AMMs are decentralized finance protocols that allow for the swapping of assets without a centralized intermediary. Just as trading firms make traditional markets, AMMs establish prices and facilitate trades using permissionless liquidity pools into which users can deposit assets.

Liquidity pools have specific ratios at which assets must be deposited. Most AMMs require that assets be added at a 50–50 ratio (the total value of Asset 1 equals the total value of Asset 2). Similar to the Balancer protocol, Osmosis allows for pools with customized weights (allowing the total value of one asset in the pool to be higher than the other) and even liquidity pools with more than two assets. Users pay a fee to buy and sell from these liquidity pools. These transaction fees are added to pool assets, resulting in a pro-rata distribution to LP shareholders. (Since one’s proportional ownership of the pool remains constant, as the total amount of liquidity in these pools increases due to fees, one’s total contributions also increase.)

Conclusion

Shrimps, users with less than $100 balance, are about 375K and 85.1% of total users, followed by Crabs, users with a $100 - $1k balance, with about 50K and 11.4% of total users, and Octopuses, users with $1k - $5k balance, with about 10K and 2.33% of total users, Dolphins, Fishes, Sharks, Whale, and Humpback Whale are in the next rank.
Shrimps have a more significant proportion than all other user groups in terms of transactions and user count, providing liquidity actions on Osmosis. Also, we observed a rising percentage of Fish and Octopus supplying liquidity as measured by volume and an increasing share of Fish and Octopus supplying liquidity as measured by volume. The number of humpback whales and dolphins providing liquidity to Osmosis pools has been steadily increasing recently, notably after May 2022. As a result, humpback whales have accounted for a sizable portion of LPing in Osmosis in recent weeks.
The Liquidity Providing activity on Osmosis significantly expanded until March 2022. However, from that point on till now, we can observe a relatively decreasing tendency over time.
Shrimps do more than half of the liquidity-providing transactions on Osmosis, with about 1.7M transactions, followed by Crabs and Octopuses.
Shrimps hold a 76.8% share of the total number of users, followed by Crabs and Octopuses. Also, Humpback Whales account for most of the liquidity volume on Osmosis, with more than $3.7M and 28.3% of total volume, fishes are ranked second, and Octopuses are ranked third.
Because we have observed multiple groups of wallets engaged in providing liquidity on Osmosis, we cannot assume that the liquidity is concentrated and owned by a limited number of whales.
By calculating the TVL of the most popular pool on Osmosis, ATOM/OSMO, we found that there is a positive correlation between the activity of the liquidity providers on the ATOM/OSMO pool and its TVL, before March 2022, both TVL and activity on this pool were increasing, but after May, both TVL and the number of transactions and users began to decline.

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