What is Optimism?

Optimism (OP) is a cryptocurrency network that has tasked itself with solving the Ethereum (ETH) blockchains scalability problem by rolling up transactions into batches to reduce the fees paid by users in the process.

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For more information click here.

What is Velodrome Finance?

Velodrome Finance, at its core, is a solution for protocols on Optimism to properly incentivize liquidity for their own use cases. Building on top of the groundwork laid out by Solidly, our team has addressed that first iteration's core issues to realize its full potential.

Metrics:

1. Daily Total Swaps on Velodrome
2. Daily Swap Volume Vs Average Swap Volume
3. Daily Net Liquidity Provided to the Top 10 Velodrome Pools
4. Daily Volume Deposited and Withdrawn from Velodrome Liquidity Pools
5. Deposited and Withdrawn from Velodrome Liquidity Pools
6. Daily Liquidity Pool Withdraws and Deposits by Percent
7. Daily LP Actions by Action
8. Daily Deposit and Withdraw Volume for Velodrome Locks
9. Volume Deposited and Withdrawn from Velodrome Locks
10. Daily Average Length of Velodrome Locks
11. Daily Staking Actions by Action
12. Daily Staking Actions by Percent of Each Action

Methodology:

In this dashboard I am going to be looking at a handful of different metrics that have to do with many different aspects of Velodrome. I will be looking at swapping, LPing, staking, and velodrome locks and doing an analysis on them over time to see how they have been adopted and how they have grown on the platform. I will then be discussing these metrics and breaking down any potential insights or conclusions I draw from the data.

Velodrome Swap Analysis:

If we look at the first graph on the left we can see that from early July to the end of July there was a large increase in the total swaps going from around 25k daily to peaks of 500k in a single day. After July though there was a sudden dip in the total swaps although it is still at higher levels than normal currently with anywhere from 60-200k in swaps daily. If we move onto the graph on the right we can see a similar trend although this graph shows us the swap volume and average swap volume daily. as you can see they follow roughly the same trend which is an overall upward one over the last couple of months. This highlights that Velodrome is growing as more users are making swaps on it everyday and the amount they are swapping is increasing. Overall it appears that the swap volume will likely stick within the 15M range daily into the near future.

Velodrome LP Action Analysis:

If we look at the first graph in the top left corner we can see a similar trend that we saw earlier in the other graphs with a lot of growth over the month of July followed by a dip before it steadied out. In this case when the dip occurred the number of withdraws began to spike and started to outweigh the number of deposits. At its worst nearly 90% the volume in LP actions was being withdrawn. Although if we move onto the graph that shows the number of withdraws we can see that although the amount the volume being withdrawn spiked massively the number of withdraw events did not spike massively. This means that the users who were withdrawing volume were withdrawing massive amounts of volume as there were not a more than normal amount withdrawing. on daily basis that normal amount seems to be anywhere from 10-20% of liquidity events are withdraws. If we move onto the final graph in this section we can see that from only looking at the top 10 pools by volume it appears a lot of liquidity is being withdrawn. Throughout the month of July it was for the most part net positives of large amounts although after July ended it seems that almost every days there is a net negative meaning the amount withdrawn is largely outweighing the amount deposited. This is likely a result of a hack that occurred to velodrome and thus many users could be losing some faith in the program. Overall Velodrome saw massive increase in volume over the course of July and most surely grew many new users over that time, although as of recent they have seen massive withdraws of volume from liquidity pools which could effect that significantly into the future.

Velodrome Staking Analysis:

If we look at the graph on the left we can see what we’ve seen across the majority of the graphs in this dashboard with an increase over July followed by a dip that recovered a shortly after. This highlights once again that Velodrome is growing and gaining more users as the daily staking events have just been increasing over time, and still remain pretty significant despite the effects of the hack. Additionally it appears that although the amount of stake events decreased a little after the hack the amount of withdraws didn’t increase highlighting that these users still trust velodrome. If we look at the graph on the right we can see this even better as the percentage of withdraws has stayed consistent over time.

Conclusion:

1. Velodrome saw major increase in Volume an users for Swaps, Staking, Velo locks, and Liquidity events over the month of July.
2. Velodrome saw a major dip in users and volume in every category mentioned above directly after July, likely as a result of the hack.
3. Velodrome has seen some serious growth over the last month or two and was able to show some solid resistance to the hack with many users still using the program and doing all sorts of activities despite potential risk and fear.
4. After the aftermath of this hack attack has cleared I believe velodrome will continue to grow as it did before gaining more users and trading more volume across each and every metric.

Velodrome Locks Analysis:

If we look at the metric in the top left corner we can see that daily deposit and withdraw volume from velodrome locks is all over the place, although one thing that is notable is the majority of the volume deposited into these locks occurred over July. After July like most of the metrics in this dashboard that changed there started to be many more withdraws and much less volume deposited. As of the last 4 days a significant percent of daily volume has been withdrawn. If we move onto the metric directly to the left we can see that the average amount of time users are locking has increased over time, this is a positive for velodrome as more users are trusting them to hold there assets for a longer period of time. Although there have been many downturns for velodrome recently it appears that this is one of the few positives that highlights growth and potentially trust in the program.