Our goal in this article is to display the decentralized exchange (DEX) pools on LOOP versus the average number of liquidity positions on the Loop DEX and display the mean, median, and mode for each of them separately.
What is a DEX(Decentralized Exchange) ?
The DEX allows tokens to be exchanged smoothly across the network and the various DeFi (Decentralized Finance) Applications. That means ,Keeping the Network decentralized and secure requires a DEX that ensures seamless asset exchange throughout the Network.
Using the Terra blockchain, Loop is a DEX (decentralized exchange) that allows token exchanges in a completely decentralized and anonymous manner. There are liquidity pools within Loop DEX so that you can trade, or add liquidity so you can earn yield.
loopfinance.com is the second automated market maker DEX on the Terra platform after TerraSwap. loopfinance.com has substantially improved upon TerraSwap exchange’s limitations. With the help of Wormhole Bridge, the platform would list Terra-based tokens for swapping and would enable the trading of Ethereum, Solana, and Thorchain Synthetic Assets, among others . In this manner, the Loop team is developing a complete multi-chain DEX on the network.
In Loop Finance, Loop is the native token. Loop can be used for governance activities as well as in an effort to establish community grants, update the protocol, and update parameters, users stake LOOP tokens. Additionally, LOOP will receive a portion of Loop’s transaction fees. Specifically, 25% of Loop’s transaction fees will go to holders who stake their LOOP tokens to maintain the LOOP price.
Here from the following tweet we can see Top 10 Liquidity pools on LOOP DEX .
Analysis of Liquidity Privoders Opened Liquidity on The LOOP DEX
As you can see by looking at the following graph, the highest average additional number of liquidity pools is 11.67 (WHWBTC/LUNA). This means that the Liquidity Pool WHWBTC/LUNA is part of an average 11.67 additional liquidity pools. Moreover, one can see that for the average of all three Liquidity Pools – SEXY/UST, ORION/UST, and MIAW/UST – the participants are the same.
What is Wormhole ? and how does it works ?
Wormhole allows users to seamlessly transfer tokens between Terra, Ethereum, Solana, Polygon and Binance Chain. It works like magic, especially for those who have been struggling to move their tokens from one blockchain to another.
In reality, Wormhole is not yet another blockchain; instead, it is a protocol that relies on existing blockchains to allow tokens to be easily transferred from one blockchain to another. Tokens such as ERC20 tokens, NFT tokens and even Oracle price feeds can be transferred between various blockchains. To facilitate transfers, Wormhole employs a leader-less, all-guardian architecture. The Wormhole guardians observe token transfers from one network to another and sign them. When 2/3 plus majority of all guardians sign the transaction, the transfer is successful.
Considering that liquidity can be transferred from one blockchain to another, and also having a flexible mindset of accessing/exploring different Liquidity pools we can see that the average number of participation in these particular wormhole Pools, such as WHBTC/LUNA, whBTC/UST, whWETH/UST, and whWETH/LUNA, is more than others.
And also here from the below graph we can see most of the Wormhole Pools, WHBTC/LUNA, whBTC/UST, whWETH/UST, and whWETH/LUNA were on an average open more than 9 Additional pools at the same time.
Here you can see we can see the Mean, Median, and Mode of various Liquidity pools and the number of positions they opened Liquidity by Liquidity Providers on Loop Dex in the below graphs.
Here Mean is nothing but the average number of times the liquidity positions opened by Liquidity providers on LOOP DEX. Comparatively, very few pools have been opened only once. It means that the maximum number of pools participated in multiple pools at the same time.
As you can see in the below graph, the Liquidity Providers’ positions on LOOP DEX have been arranged according to mode. The highest number of pool modes (WHWBTC/LUNA) is 9 and that means most commonly, WHWBTC/LUNA liquidity providers are located in nine separate pools.
On the following graph, we can see a comparison of the Mean, Median, and Mode of additional positions opened by each Liquidity Providers on the LOOP DEX. Here , we can see that the majority of the liquidity pools occur only once frequently even though they have more than one position open by the liquidity providers.
The LOOP Pools are divided into two: with LUNA pools and without LUNA pools for a more clear visualisation. On the following graphs, we can see a comparison of the Mean, Median, and Mode of additional positions opened by each Liquidity Providers on the LOOP DEX according to the categories.
From the above analysis ,
- Particularly in Wormhole Pools, Liquidity providers such as WHBTC/LUNA, WBTC/UST, whWETH/UST and whWETH/LUNA open a greater number of positions on Loop DEX than others. Through a flexible mindset to access/explore a wide variety of liquidity pools and blockchains, we can observe that in Wormhole Liquidity Providers.
- Mode: From the above comparison, WHWBTC/LUNA is the most frequently occurring liquidity pool. This means that this liquidity provider participates with other liquidity providers more frequently.
- And also we can see that the majority of the liquidity pools occur only once frequently (ie,Mode) even though they have more than one position open by the liquidity providers.