PolygonInsights - Bridge Flows Jan-Aug 2022

From January to August 2022, more than $11 Bn has entered the Polygon ecosystem from multiple chains. Ethereum ($8.2 Bn+), Fantom Opera ($1.06 Bn+), and Binance ($863 Mn+) have had substantial inflow contributions and while January ($590 Mn+) recorded the highest net volume, there was a sharp decrease in February followed by a revival in March ($585 Mn).

Most successful bridges were Polygon PoS ($1 Bn), Polygon Plasma Bridge ($250 Mn), and Multichain ($131 Mn) and amongst all bridges, USDC ($752 Mn), SAND ($433 Mn), and USDT ($360 Mn) tokens made up the most of net positive volume.

This report covers: AllBridge, Celer cBridge, Connext, EVO DeFi, Hop Protocol, Multichain, Plasma Bridge, Polygon PoS Bridge, Stargate Finance, Synapse Protocol, Wormhole Portal Bridge. These bridges contain only a subset of the total flows within the network, but are significant ones by unique and active user counts. Interestingly, seven of the eleven bridges recorded net positive volumes.

Bridge_Volume_Analysis

Ethereum and Fantom Opera take the lead in net volume and we saw inflows of $8.2 Bn from Ethereum to Polygon, with Fantom recording $1.06 Bn inflows.

Only 16 of the 35 chains tracked have a net positive inflow, but while the top five chains (Ethereum, Fantom, Cronos, Moonbeam, and Moonriver) have a cumulative net volume of over $1.1 Billion, the 19 with net negative add up to -$375 Mn.

Both Polygon PoS bridge and Plasma started the year strong with $471 Mn and $126 Mn each, followed by a drop in February, which was half a billion dollars in the month after. Since then, we’ve had a total net volume of $430 Mn.

After these two, among third-party bridges, Multichain leads the pack ($131 Mn), followed by Synapse Protocol ($83 Mn), Wormhole ($40 Mn), and Connext ($15 Mn). The average volume across all the tracked bridges stands at $115 Mn.

Net_volume_by_bridge_chain

Among bridge-chain pairs, PoS Bridge continues to shine, followed by Plasma bridge. Multichain follows suit with bringing over $90 Mn from Fantom and Arbitrum. If we look closer at these two pairs, the Fantom-Multichain pair consists mainly of WETH ($89 Mn) and DAI ($32 Mn) on the positive, while only USDT (-$8 Mn) in the negative.

Looking only at inflows, Multichain overshadows the Plasma bridge with inflows from Fantom Opera and BSC. Interestingly, Multichain bridge has a net positive volume from all of 15 chains bar Huobi (-$10 Mn), bringing it up to the $131 Mn volume mark. While Celer cBridge has a net outflow ($4 Mn) over the entire period - Fantom, BSC, Harmony and Avalanche all have a positive result, with Ethereum ($137 Mn) skewing the overall volume below zero in outflows.

Inflow_volume_by_bridge_chain
Outflow_volume_by_bridge_chain

While 57 pairs have a net outflow - the average is only negative $13 Mn. While the Ethereum- Hop Protocol pair has a below average performance, with -$103 Mn in net volume, Ethereum - PoS bridge pair was a strong performer with +$1 Bn.

Daily_monthly_net_volume

Looking at the monthly net volume progression, we have had only two net negative months - February and June, primarily driven by outflows to Ethereum. However, the net drainage in both cases recovered with surplus in the subsequent month.

115 out of 243 days in the reported year recorded net outflows. This doesn’t however paint the full picture. If we look at the average volume in those 115 days, it’s a negative $15.8 Mn, which is shadowed by $24 Mn on the net positive days. For months like May, despite having the majority of the outflow days, net volume across all 35 chains tracked was positive.

Trade_Size_Analysis
Average_inflow_trade_size

In terms of trade size, the average inflow transaction (major bridges to Polygon) was about $4k, across a total of 1.1 Mn inflow transactions (1.5 Mn across all bridges) via these top bridges. There were 415k total outflow transactions with an average trade size of $5.2k. In terms of bridges, the average inflow transaction on Multichain was a whopping $14.5k, followed by Plasma ($10.8k) and PoS ($10.2k). Hop Protocol and Connext are at the other end of the spectrum with averages of $729 and $355 and each.

The average trade size further jumps to $7.9k if we look at the inflow transactions on the top six chains by inflow (Ethereum, Fantom Opera, BSC, Avalanche, Arbitrum and Optimism). Fantom and Avalanche have an average inflow trade size of more than $12k.

Token_Flows
ERC20_tokens_by_net_value

The average net volume for the 391 ERC-20 tokens tracked was $3.22 Mn with most of them putting up net positive volume. In top tokens, we see bluechip stablecoins (USDC and USDT), MATIC, and SAND. This is driven by The Sandbox’s support on Polygon PoS, attracting new users in abundance from Ethereum to Polygon, leveraging the benefits of our thriving gaming and NFT ecosystem. $NEXM is a surprise addition, with practically all of its inflows coming in the month of June via the Wormhole bridge.

Net_volume_by_symbol

The top bluechip stablecoins - USDC and USDT have had just one net negative month (February, -$57 Mn), which completely recovered in March (+$607 Mn). The average monthly inflow for these is $777 Mn compared to $638 in average monthly outflows across the two coins.

Polygon_PoS_Bridge

For the major part of this year, Polygon PoS Bridge has been among Top 5 dApps by unique users on Ethereum according to dApp Radar. The PoS Bridge, developed by the Polygon team, is a safe, fast and highly secure way to bring cross-chain assets to the Polygon PoS chain. 

Let’s dive deeper into the first-party bridge, with a special shoutout to UniWhales DAO and their bridge tracker.

PoS_Bridge_Case_Study

Year to date, PoS bridge has accounted for nearly 385k unique depositors, while only 82k unique addresses have used the bridge for bridging back to Ethereum. With nearly a Billion dollars in net volume to the chain, the bridge has contributed largely to bringing existing Ethereum users to the Polygon PoS chain, which recently crossed 170 Mn unique addresses and processed 2 Bn transactions

CONCLUSION

To conclude, the primary volume is controlled by Ethereum <> Polygon and the PoS Bridge and till the end of August, we have had $11.75 Bn in total inflows. 43 bridge-chain pairs record a net positive volume with an average of $48 Mn. In terms of net volume per bridge, Polygon PoS bridge is the clear winner with $1.05 Bn, followed by our Plasma bridge with $250 Mn.

While inflows on Polygon have surpassed outflows for most cases in the considered period, occasionally certain outflows took the lead due to some specific events. But we frequently saw the tide shift back in the subsequent month in such cases, signaling the general positive trend. The overall inflows from major contributors - Ethereum ($8.2 Bn+), Fantom Opera ($1.06 Bn+), and Binance ($863 Mn+) have bolstered Polygon’s ecosystem through the recent bear market. 

For in-depth weekly analysis threads, view our Analytics resources on GitHub.


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