Finding Pool Depth through Number of Liquidity Providers

The objective of this article is to explore the current depth of each pool based on the number of liquidity providers that provide liquidity.

What is Liquidity and Liquidity Providers?

The Liquidity and Liquidity Providers are essential components for decentralized finance (DeFi) and THORChain.Trading on the THORChain network is made possible through “liquidity pools” – pools of cryptoassets that other users in the network (termed “liquidity providers” or “LPs”) deposit into the network for swappers to trade against, they receive LP fees and block rewards in return for yield on their assets.

As part of each swap on THORChain, LPs pay a small fee, which is split amongst them based on the amount of assets that they have contributed to the pool.A portion of newly minted $RUNE tokens is allocated to LPs according to the THORChain protocol in addition to LP fees.

Depth of Liquidity Providers on Different Blockchains

Based on the liquidity providers who provide them with liquidity, we find the Depth of the Pool.A total of 11.27K liquidity providers provide liquidity to all 13 pools.The top 2 pools (BTC.BTC & ETH.THOR) accounted for 40.51% of all liquidity providers, and the top 3 pools (BTC.BTC, ETH.THOR & ETH.XRUNE) accounted for 54.53%.

1. Binance – Liquidity Providers Pool Depth:

In Binance Blockchain, the total number of liquidity providers between W41, 2021 and W45, 2021 was 42.12K. A total of 34.05% of total Depth of Liquidity Providers came from the top 2 pools and 58.01% of the top 4 pools.Here, (BNB.ETHBULL) has the lowest total depth of liquidity, while 8.66K (BTC.BTC) has the highest.The lowest total Liquidity Providers are 3 (BNB.DOT), and the highest total Liquidity Providers are 2.49K (ETH.THOR).

The maximum Depth Of Liquidity Providers of 13.14K was observed in W45, 2021, and the minimum Depth Of Liquidity Providers of 4.07K was observed in W41, 2021. In W45, 2021 total Depth Of Liquidity Providers increased by 13%. In this pool, the depth has been raised from W41, 2021 to W45, 2021

2. Bitcoin, Bitcoin Cash and Litecoin – Liquidity Providers Pool Depth:

In the Bitcoin, Bitcoin Cash, and Litecoin Blockchain, Total Depth Of Liquidity Providers was 11.23K from W41, 2021 to W45, 2021.Out of the 3 pools, Pool BTC.BTC contributes the most (77.15%) to the total Depth Of Liquidity Providers.It is estimated that the lowest total Depth Of Liquidity Providers is 571 (BCH.BCH) and the highest total Depth Of Liquidity Providers is 8.66K (BTC.BTC).

The maximum Depth of Liquidity Providers was observed in W45, 2021, and the minimum was observed in W41, 2021.Since W41,2021, the total number of liquidity providers has doubled to W45,2021.LTC.LTC rose the most in Depth of Liquidity Providers for W45, 2021, at 6.83%.

3. Ethereum – Liquidity Providers Pool Depth:

Among Ethereum’s Blockchain 19 pools, the Total Depth Of Liquidity Providers was 15.26K between W43, 2021 to W45, 2021.A total of 29.7% of total Depth of Liquidity providers came from ETH.XRUNE Pools and 57.6% of total Depth of Liquidity providers came from Top 2 Pools.

ETH.FOX has the lowest total Depth Of Liquidity Providers (25), while ETH.XRUNE has the highest (4.53K).Minimum Depth Of Liquidity Providers of 3.4K was observed in W43, 2021 and maximum Depth Of Liquidity Providers of 6.53K were observed in W45, 2021.Depth of Liquidity Providers almost double from W43, 2021 to W45, 2021. Total Depth Of Liquidity Providers increased by 23% in W45 in 2021.

Depth of Top Pools From 3 Different Blockchains(Ethereum,Binance ,Bitcoin,Bitcoin Cash and Litecoin)

From the above Blockchains, we consider the top pools as BNB.BUSD , ETH.ETH , BTC.BTC , BNB.BNB , ETH.XRUNE or ETH.THOR. Taking a top-level view of the above three Blockchains, we can estimate that the Total Depth of Liquidity Providers between W41, 2021 to W45, 2021 was 32.45K.More than a quarter (26.7%) of the total Depth of Liquidity Providers were BTC.BTC Pools, and 61.33% were Top 3 Pools.

In terms of total Depth Of Liquidity Providers, the lowest is 3.98K (ETH.THOR) and the highest is 8.66K (BTC.BTC).W45, 2021 had a maximum Depth Of Liquidity Providers of 10.3K, and W41, 2021 had a minimum Depth Of Liquidity Providers of 3.22K.Depth of Liquidity Providers for W45, 2021 showed 6 pools trending upward, with ETH.THOR rising the most, at 67.34%.

Observations

  • Pool depth is determined by the number of liquidity providers.The depth of the pool would also be higher if we had more liquidity providers.
  • We can say that the ETH.THOR pool comes under the Topmost pool in depths among all three block chains due to the maximum number of Liquidity Providers.
  • Among all Binance pools, the BNB.BNB and BNB.BUSD pools have the most depth. The depth of all pools in Binance was increasing.
  • Bitcoin, Bitcoin Cash, and Litecoin, BTC.BTC pool’s LP is greater than those of other pools.That means we can specifically say that the depth of this pool is greater than that of other pools in this blockchain.
  • In the Ethereum Blockchain, ETH.THOR’s liquidity pool has been increasing steadily over the past 3 weeks.Currently, ETH.THOR pool is dominating liquidity providers in this blockchain.
  • ETH.ETH & ETH.XRUNE pools are maintaining the high number of liquidity providers from the past weeks, as well as maintaining a high depth.
  • Taking into account all top pools from 3 Blockchains, the total depth of liquidity providers has almost tripled from W41,2021 to W45,2021.

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