Analyze The Impact Of Recent Market Volatility On Sushi Tokens

Our goal with this dashboard is to analyze the effects of recent market volatility on the sushi token. What was its supply and demand dynamic? In terms of liquidity, how did SUSHI do on UniSwap and SushiSwap? How is SUSHI’s staking situation? Have many SUSHIs been unstaked?

Since we already know about Sushiswap, let’s briefly discuss it before we examine its swap volume during the recent market volatility caused by Terra. Sushiswap is one of the most prominent DEXs (or AMMs) on the Ethereum protocol. Due to the Vampire Attack on Uniswap, it attracted a lot of attention on its initial launch. As with Uniswap V2, Sushiswap uses smartcontracts and 50%-50% paired token liquidity pools to facilitate distributed swaps.
SUSHI is an ERC-20 token from Sushiswap, primarily used for governance, staking, and earning rewards. When a user performs a swap on Sushiswap, 0.05% of the transaction fee is distributed to holders of xSUSHI (acquired by staking SUSHI).
XSUSHI tokens are also used as utility tokens in the governance process. By voting on upgrades and changes to the Sushiswap protocol, the XSUSHI holders can influence these decisions.  

The LUNA price fell 96% in a day on May 12th, 2022, pushing it down to less than 10 cents. In the tweet below we can see the price drop of LUNA into $.02.

A huge drop in LUNA’s price caused a lot of volatility in the other crypto market during these days (May 9th to 13th, 2022). There has been a change in the liquidity of the SUSHI token on the different DEX pools on Sushiswap. In this dashboard, we’ll go through the changes and look at the details.

Here from the below graph we can see the liquidity of SUSHI tokens across various DEX pools in May 2022. From the 3 DEX, sushiswap is the most active (97.1%). The lowest total Sushi Tokens is 2.83K (uniswap-v3) and the highest is 244.49M (sushiswap). There is a maximum Sushi Token of 12.66M on May 10, 2022. Sushi Tokens are declining over time. A price drop in SUSHI token is clearly a result of the market volatility, so we can say that the liquidity will be reduced as a result of the token price drop.

We can see from the below graph how liquidity of SUSHI tokens has changed across various DEX pools compared to their previous day. For example, Uniswap-v2 showing that the SUSHI tokens liquidity was increased 28.7% on May 11th 2022. Comparing May 13th,2022 to the previous day, the liquidity change of SUSHI tokens decreased by -12.9% on Sushiswap. 

From the below graph we can see the liquidity of SUSHI tokens in USD vs ETH price during May 2022. The maximum amount of sushi liquidity in USD of $30.07M was observed on May 5, 2022, and the minimum amount of sushi liquidity in USD of $11.58M was observed on May 19, 2022. The trend for Sushi Liquidity In USD is decreasing. Total Sushi Liquidity in USD is lower than normal on May 12, 2022. The maximum ETH price was $2.86K on May 5, 2022, and the minimum price was $1.95K on May 12, 2022. Ethereum’s price is trending downward. In comparison with the ETH token price, we can see that the liquidity of the SUSHI tokens decreased as well. Therefore, we can say that they are both correlated and also we can say that they are entirely dependent on market volatility.

From the below graph we can see the SUSHI liquidity change vs ETH price change with the previous day during May 2022. Here we can clearly see they both are correlated with each other.

We can see from the below graph which xSUSHI tokens have been staked during May 2022, and which xSUSHI tokens have not been staked. We can see that the amount of xSUSHI tokens staked on May 11th 2022 is in close proximity to the maximum amount. As well, if we take a look at the May 15th 2022, there are almost 5M xSUSHI tokens unstaked. It’s likely that this happened due to the market volatility and the drop of the SUSHI token price at the time. 

Here from the below graph we can see the net staked tokens of xSUSHI on Sushiswap during May 2022. Here we can see on May 15th 2022, there is a maximum -4.57M of xSUSHI tokens were unstaked from the sushiswap. After May 11th we didn’t see staking of xSUSHI tokens next 2 days(May 12th and 13th).Suddenly we can see on May 15th 2022, a maximum amount of xSUSHI tokens were unstaked from the sushiswap. We can suspect this behaviour was happened by the volatility of market.

There was a maximum xSUSHI Token staking and unstaking of transactions were happened in W19(May 8th-14th), 2022. Maximum Staking Operations of 588 was observed in W19, 2022.

Observations

  • From the above analysis, we will look at the Liquidity of SUSHI Tokens across different DEX pools in May 2022.  Among the 3 DEX, sushiswap is the most active (97.1%). The lowest amount of Sushi Token has been 2.83K (uniswap-v3), the highest has been 244.49M (sushiswap).
  • Furthermore, we can see there is a maximum amount of Sushi Token available on May 10, 2022. Prices for Sushi Token are declining over time. We can conclude that SUSHI tokens’ price drop is a result of market volatility, therefore, liquidity will be reduced as a result of the token price drop.
  • As we compare the change of liquidity of SUSHI tokens, Uniswap-v2 shows that the SUSHI tokens liquidity increased by 28.7% on May 11th 2022 with the previous day. When we compare May 13th,2022 to the previous day, the liquidity change of SUSHI tokens decreased by -12.9%. 
  • Looking at the liquidity of SUSHI tokens in USD vs ETH price during May 2022, we can say that they are both correlated.
  • We can observe from the xSUSHI tokens-staking and unstaking tokens that the amount of xSUSHI tokens staked on May 11th 2022 is in close proximity to the maximum amount. Additionally, according to the May 15th 2022 xSUSHI token balance, there are almost 5 million unstaked tokens. Probably due to the market volatility and the drop in the SUSHI token price at the time, this occurred. It is also possible to say that there has been a great deal of unstaking during that period.
  • There were no xSUSHI token stakes the next two days (12th and 13th). Suddenly, we see on May 15th, a maximum amount of xSUSHI tokens were unstaked from the sushiswap. Perhaps, the volatility of the market caused this behavior. 

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