fknmarqu🥪 MEV Monitor: Solana Sandwich Attacks
Table of ContentsIntroductiontl;drThe Financial Impact: Quantifying the Drain & Costs 3.1 Overall Scale of Value Extraction 3.2 Attacker Economics: Costs vs. Profitability 3.3 User Costs: Direct Losses and Transaction Fees 3.4 Temporal Impact Trends 3.5 Summary of Financial ImplicationsWho & How: The Attacker Landscape & Strategies 4.1 The Dual Challenge: Attribution & Ecosystem Complexity 4.2 Attacker Economics as a Behavioral Proxy 4.3 Diverse Execution Methods & Infrastructure Insights 4.4...
fknmarquUniswap v3 Gas ⛽️
When using a smart contract blockchain, users have to pay a fee to miners/validators so they include their transaction into the next block to get executed. The fee is called gas and how much of it you need to pay depends on the complexity of the transaction. But while the amount of gas needed for a contract remains constant over time, the price of gas does not, being subject to market forces of supply and demand. *While there is more to say on the subject of gas, Etherscan says it better. In ...
fknmarquWho's onboarding Solana users?
I think we all have a feeling that Solana keeps on growing as an ecosystem and users continue to join the blockchain. But how are users actually getting onboarded? And how many of them stick around? In this report we will look at three categories users can interact with and follow their retention rates over the course of 6 weeks. These categories are:ProgramsNFTsTokensA quick note on new users: we’re considering an address to be new if it did not make any transaction in the respective categor...
fknmarqu🥪 MEV Monitor: Solana Sandwich Attacks
Table of ContentsIntroductiontl;drThe Financial Impact: Quantifying the Drain & Costs 3.1 Overall Scale of Value Extraction 3.2 Attacker Economics: Costs vs. Profitability 3.3 User Costs: Direct Losses and Transaction Fees 3.4 Temporal Impact Trends 3.5 Summary of Financial ImplicationsWho & How: The Attacker Landscape & Strategies 4.1 The Dual Challenge: Attribution & Ecosystem Complexity 4.2 Attacker Economics as a Behavioral Proxy 4.3 Diverse Execution Methods & Infrastructure Insights 4.4...
fknmarquUniswap v3 Gas ⛽️
When using a smart contract blockchain, users have to pay a fee to miners/validators so they include their transaction into the next block to get executed. The fee is called gas and how much of it you need to pay depends on the complexity of the transaction. But while the amount of gas needed for a contract remains constant over time, the price of gas does not, being subject to market forces of supply and demand. *While there is more to say on the subject of gas, Etherscan says it better. In ...
fknmarquWho's onboarding Solana users?
I think we all have a feeling that Solana keeps on growing as an ecosystem and users continue to join the blockchain. But how are users actually getting onboarded? And how many of them stick around? In this report we will look at three categories users can interact with and follow their retention rates over the course of 6 weeks. These categories are:ProgramsNFTsTokensA quick note on new users: we’re considering an address to be new if it did not make any transaction in the respective categor...
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With the Ethereum Merge right around the corner (scheduled to take place on Sept 15, 2022), it is a good time to look back at the platforms offering Liquid ETH Staking and check their performance in terms of attracted users and deposits.
This report includes data on 6 liquid staking providers, which should account for most of the market. Other platforms can be considered to be offering liquid staking for ETH, but the process is split between the centralized service and the on-chain asset. One example of this is the recently launched Coinbase Wrapped Staked ETH (“cbETH”), where Coinbase users who have already staked their ETH through the platform can choose to “wrap” their stake and receive the liquid staking token on the Ethereum Mainnet. Tracking the amount of ETH liquid staked through Coinbase is not doable because the tokens are minted directly to the user wallet at a variable exchange rate not passed on-chain.
The data referred to in this report was queried on the date of writing, but the live dashboard can be further explored, interacted with and be updated on-demand by following the link below 👇:
https://app.flipsidecrypto.com/dashboard/eth-liquid-staking-providers-hwB66B
☝️ The dashboard can be updated on-demand by pressing the refresh button 🔄 in the top right corner of the page.
The general process of liquid staking ETH starts with the user depositing their tokens to the service provider. In return, the depositor receives a ERC-20 token representative of their deposit which they can either use in various DeFi applications or redeem for the initial amount plus accrued rewards once withdrawals are enabled post Merge.
Because the amount of tokens received when liquid staking depends mostly on how the provider chooses to distribute rewards, we will be tracking the deposit events of each service to accurately track the amount of ETH being deposited with each.
We can spot the first deposits to these services being made in early November 2020, specifically with Ankr and shortly followed by C.R.E.A.M.. In the almost two years that have passed since then, almost 4.5M ETH were staked through the 6 providers.
Although not the first to the market, Lido quickly took over its competition and took the front spot by total deposited amount by early January 2021, continuing to this day to be the front-runner and facing very little competition along the way. Over 93% of all liquid staked ETH was deposited through Lido.
But while competition hasn’t changed much overall, we can see a sharp decline in staking activity in mid May 2022. On closer inspection, this severe drop only affected Lido, with the rest of the providers continuing to have daily deposits comparable to the previous period. The change in behavior for Lido users was sparked by what was perceived as a “depeg” from the value of stETH. The event can be further explored in this report.
Despite the exchange rate partly recovering and the asset technically offering ETH at a discount, depositing volumes never returned and they’re not being seen in any of the other services either.
With Lido representing such a large portion of the market, we can see average deposit sizes also being severely impacted after the May events.
Liquid staking users mostly deposited between 0-1 ETH per transaction, but we can also see a large number of users depositing all the way up to 1k+. This behavior determines a similar skew when we look at the distribution of total ETH deposited by users over the observed time frame, where most have staked between 0-1 ETH.
Liquid staking services have gradually increased their popularity over time, with more addresses making deposits on a weekly basis. Across all providers, there are over 91k distinct addresses that have used at least one platform to liquid stake their ETH.
As we might expect at this point, the platform with the most users is by far Lido, which just as with the deposit volumes, quickly became the most popular liquid staking provider. But despite its dominating position, in the case of users attracted we can see a bit more competition coming from Ankr, StakeWise and more recently RocketPool.
In terms of new users (addresses making a deposit to a provider for the first time), Lido continues to have the greatest influx, despite the diminished deposits. But while other platforms’ declining popularity (or disappearance in the case of C.R.E.A.M. following its exploit), we can see RocketPool revving up its engines and steadily increasing the number of new users, potentially placing it in a contender position for the top spot moving forward.
With so many options available on the market, we can expect users to use/try multiple platforms over time. However, perhaps given the high stakes of the activity, only a fraction of users have used two or more platforms.
We can however break down this cross-over activity by provider and by doing so we can see that users don’t behave the same across the board. While in the case of Guarda we only have a x_ratio of 0.43, more than half of RocketPool users have used at least one other provider.
By making the staking process so effortless, liquid staking enables users to follow investing strategies such as Dollar Cost Averaging in order to reduce their exposure to the volatility of the underlying ETH.
In order to find what users are following this strategy, a few assumptions were made:
Users made more than 3 deposits.
Deposits were made at a distance of at least 1 day.
The USD amount of the deposit is within a 10% range from the average amount of all its deposits.
More than half of the deposits fit the criteria above.
By following this model, we could find only 42 addresses DCA-ing their way into staking ETH. Most of them made 4 or 5 deposits, but some go all the way up to 12. Their individual deposit sizes range from $10k worth of ETH to over $100k, placing them in the upper brackets of liquid staking users.
The list of DCA users can also be used to further inspect their activity and how each purchase fits on the model using this Liquid Staking DCA Test Tool. Changing the user_address parameter requires the user to be logged in.
Liquid staking providers are responsible for enabling over 4.4M ETH to contribute to the security of the PoS network in preparation to the Merge while still being able to participate in DeFi applications. The pace of deposits gradually increased over time as the Merge came closer to reality and withdrawal timelines became more predictable.
Most of the 91k unique users deposited their ETH through Lido, who quickly became the undisputed liquid staking leader shortly after the first few platforms were launched on the Ethereum Mainnet back in late 2020. While impressive for a protocol to dominate a market so much and for so long, it also sparked a debate on whether it is good for the security of a network for so many tokens to be entrusted to a single entity.
Following the May 2022 panic surrounding Lido’s stETH and a sharp decrease in the amounts deposited to it, the opportunity opened up for other providers to step up and claim more of the market. Out of the platforms we looked at, RocketPool seems to have taken the most advantage of this opening and considerably increased its new users count over the last few months, but deposit volumes remain considerably lower than Lido’s event at the current levels.
Although liquid staking providers make the process as effortless as possible, making investment strategies possible, not many depositors rely on strategies such as DCA to make their way into staking ETH to their target amount. Those who do however, are situated in the upper brackets of liquid staking users by the amounts deposited.
With the Ethereum Merge right around the corner (scheduled to take place on Sept 15, 2022), it is a good time to look back at the platforms offering Liquid ETH Staking and check their performance in terms of attracted users and deposits.
This report includes data on 6 liquid staking providers, which should account for most of the market. Other platforms can be considered to be offering liquid staking for ETH, but the process is split between the centralized service and the on-chain asset. One example of this is the recently launched Coinbase Wrapped Staked ETH (“cbETH”), where Coinbase users who have already staked their ETH through the platform can choose to “wrap” their stake and receive the liquid staking token on the Ethereum Mainnet. Tracking the amount of ETH liquid staked through Coinbase is not doable because the tokens are minted directly to the user wallet at a variable exchange rate not passed on-chain.
The data referred to in this report was queried on the date of writing, but the live dashboard can be further explored, interacted with and be updated on-demand by following the link below 👇:
https://app.flipsidecrypto.com/dashboard/eth-liquid-staking-providers-hwB66B
☝️ The dashboard can be updated on-demand by pressing the refresh button 🔄 in the top right corner of the page.
The general process of liquid staking ETH starts with the user depositing their tokens to the service provider. In return, the depositor receives a ERC-20 token representative of their deposit which they can either use in various DeFi applications or redeem for the initial amount plus accrued rewards once withdrawals are enabled post Merge.
Because the amount of tokens received when liquid staking depends mostly on how the provider chooses to distribute rewards, we will be tracking the deposit events of each service to accurately track the amount of ETH being deposited with each.
We can spot the first deposits to these services being made in early November 2020, specifically with Ankr and shortly followed by C.R.E.A.M.. In the almost two years that have passed since then, almost 4.5M ETH were staked through the 6 providers.
Although not the first to the market, Lido quickly took over its competition and took the front spot by total deposited amount by early January 2021, continuing to this day to be the front-runner and facing very little competition along the way. Over 93% of all liquid staked ETH was deposited through Lido.
But while competition hasn’t changed much overall, we can see a sharp decline in staking activity in mid May 2022. On closer inspection, this severe drop only affected Lido, with the rest of the providers continuing to have daily deposits comparable to the previous period. The change in behavior for Lido users was sparked by what was perceived as a “depeg” from the value of stETH. The event can be further explored in this report.
Despite the exchange rate partly recovering and the asset technically offering ETH at a discount, depositing volumes never returned and they’re not being seen in any of the other services either.
With Lido representing such a large portion of the market, we can see average deposit sizes also being severely impacted after the May events.
Liquid staking users mostly deposited between 0-1 ETH per transaction, but we can also see a large number of users depositing all the way up to 1k+. This behavior determines a similar skew when we look at the distribution of total ETH deposited by users over the observed time frame, where most have staked between 0-1 ETH.
Liquid staking services have gradually increased their popularity over time, with more addresses making deposits on a weekly basis. Across all providers, there are over 91k distinct addresses that have used at least one platform to liquid stake their ETH.
As we might expect at this point, the platform with the most users is by far Lido, which just as with the deposit volumes, quickly became the most popular liquid staking provider. But despite its dominating position, in the case of users attracted we can see a bit more competition coming from Ankr, StakeWise and more recently RocketPool.
In terms of new users (addresses making a deposit to a provider for the first time), Lido continues to have the greatest influx, despite the diminished deposits. But while other platforms’ declining popularity (or disappearance in the case of C.R.E.A.M. following its exploit), we can see RocketPool revving up its engines and steadily increasing the number of new users, potentially placing it in a contender position for the top spot moving forward.
With so many options available on the market, we can expect users to use/try multiple platforms over time. However, perhaps given the high stakes of the activity, only a fraction of users have used two or more platforms.
We can however break down this cross-over activity by provider and by doing so we can see that users don’t behave the same across the board. While in the case of Guarda we only have a x_ratio of 0.43, more than half of RocketPool users have used at least one other provider.
By making the staking process so effortless, liquid staking enables users to follow investing strategies such as Dollar Cost Averaging in order to reduce their exposure to the volatility of the underlying ETH.
In order to find what users are following this strategy, a few assumptions were made:
Users made more than 3 deposits.
Deposits were made at a distance of at least 1 day.
The USD amount of the deposit is within a 10% range from the average amount of all its deposits.
More than half of the deposits fit the criteria above.
By following this model, we could find only 42 addresses DCA-ing their way into staking ETH. Most of them made 4 or 5 deposits, but some go all the way up to 12. Their individual deposit sizes range from $10k worth of ETH to over $100k, placing them in the upper brackets of liquid staking users.
The list of DCA users can also be used to further inspect their activity and how each purchase fits on the model using this Liquid Staking DCA Test Tool. Changing the user_address parameter requires the user to be logged in.
Liquid staking providers are responsible for enabling over 4.4M ETH to contribute to the security of the PoS network in preparation to the Merge while still being able to participate in DeFi applications. The pace of deposits gradually increased over time as the Merge came closer to reality and withdrawal timelines became more predictable.
Most of the 91k unique users deposited their ETH through Lido, who quickly became the undisputed liquid staking leader shortly after the first few platforms were launched on the Ethereum Mainnet back in late 2020. While impressive for a protocol to dominate a market so much and for so long, it also sparked a debate on whether it is good for the security of a network for so many tokens to be entrusted to a single entity.
Following the May 2022 panic surrounding Lido’s stETH and a sharp decrease in the amounts deposited to it, the opportunity opened up for other providers to step up and claim more of the market. Out of the platforms we looked at, RocketPool seems to have taken the most advantage of this opening and considerably increased its new users count over the last few months, but deposit volumes remain considerably lower than Lido’s event at the current levels.
Although liquid staking providers make the process as effortless as possible, making investment strategies possible, not many depositors rely on strategies such as DCA to make their way into staking ETH to their target amount. Those who do however, are situated in the upper brackets of liquid staking users by the amounts deposited.
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