In this dashboard, we seek to display daily average swap sizes for ten of the largest liquidity pools (in terms of value locked). How have these swap sizes evolved over time?
SushiSwap? How does it work?
SushiSwap is an automated market maker that uses UniSwap’s code. Users can swap cryptocurrencies, borrow, and receive rewards on a platform that runs on Ethereum.
With SushiSwap, users can buy and sell different cryptocurrencies between themselves, like on a traditional exchange.On SushiSwap, tokens are supported by smart contracts rather than a single central entity, and users lock crypto on the software which traders can then access.It should be noted that traders who trade locked assets pay a fee, which is then shared proportionately among all liquidity providers.
Liquidity Pools in Sushiswap
The purpose of liquidity pools is to pool tokens (also known as liquidity) so that users can use them to make trades in a decentralized way. These liquidity pools are created by users and DApps (Decentralized Apps) who want to benefit from their usage. The SushiSwap liquidity pools allow anyone to provide liquidity, and in return, they receive SLP tokens (SushiSwap Liquidity Provider tokens). For example, if a user deposited $SUSHI and $ETH, they would receive SLP tokens for the SUSHI-ETH pool.A user can reclaim their tokens from the LP pool at any time, which represents their share of the pooled assets. Every time another user uses the pool to trade between $SUSHI and $ETH, a 0.3% fee is taken, with 0.25% going to the pool.
Since Uniswap helps to provide liquidity only when it’s active, liquidity providers only earn revenue when they’re actively supplying liquidity. Once they withdraw their portion of the pool, they stop earning passive income.
But with Sushiswap, SUSHI tokens can also be issued for providing some liquidity into a pool. While SUSHI tokens will not give you a stake in the protocol, they will also give you continued access to a portion of the protocol’s fees, accumulated in SUSHI, even if you decide not to participate in the liquidity provision.
TVL : TVL stands for total value locked, which describes the spot value (normally in USD) of all assets staking in a protocol. It is usually used as an indication of the health of a protocol.
Swap : A swap is the process of trading one cryptocurrency for another, for example, USD Coin (USDC) for Ethereum (ETH).
In the below graph, we are taking a look at the top ten swap pools according to their TVL.
From the below graph we can see a top 10 swap pools on Sushiswap by their TVL.In comparison with the other top 10 pools, the Top 2 pools ILV-WETH SLP and USDC-WETH SLP contributed almost 40% of TVL. OHM-WETH LP has the lowest TVL at 44.59M whereas ILV-WETH SLP has the highest at 321.73M.
Here from the below graph we can see the daily swapped transactions on top 10 pools . 44.21% of USDC-WETH SLP Pool Names contributed to total Transactions, and 69.84% of total Transactions were contributed by the Top 2 Pools (USDC-WETH SLP and WETH-USDT SLP). BIT-WETH SLP has the lowest number of Transactions with 896. USDC-WETH SLP has the highest number with 139.23K. Among 10 pool transactions for Q0, TOKE-WETH SLP fell the most by 93.22%
On the below graph , we can see how the transactions were distributed among the top 10 pools.
In the following graph, we can see how much money is swapped on all of these top 10 pools, and we can also see how they are distributed. Out of all top 10 pools, OHM-WETH LP had the lowest Avg Swapped Amount at 15.53k and OHM-DAI LP had the highest at 53.5k, respectively.
We separated the average swapped amount of top 10 pools into two graphs to get a better understanding of the average swapped amount. According to the Top1-5 pools graph , BIT-WETH SLP and ILV-WETH SLP aren’t visible from the beginning and can be seen only after Jan 21,2022.Although the ILV-WETH SLP is seen recently, it holds a position 1 in the TVL of current top 10 pools. According to the above analysis , the BIT-WETH SLP pool will also become available on January 21,2022. However, if we look at the current list of top 10 pools ranked by TVL, this pool is ranked third.
Note: ILV-WETH SLP ” Illuvium, an open-world RPG blockchain game based on Ethereum, will be released in 2022. Players cross a fantasy world battling creatures called Illuvials.Furthermore, players will be able to acquire non-fungible tokens (NFTs) for creatures and cosmetic upgrades. As they progress through challenges, quests, and battles, they will earn ILV tokens for their efforts.The play and earn feature can be considered as an attractive attribute for happening more swaps from this pool .
In addition, the swap pools WETH-ALCX SLP, OHM-DAI LP, and OHM-WETH LP are visible from the recent dates, and they are all in the Top 6-10 pools by their current TVL.