Decentralization of Terra’s Validator System

On Terra, transaction fees generated by token swaps work to maintain the peg of stablecoins to their associated fiat currency. How many fees are being paid out each day for the past 30 days? Do we see any big differences between the different stablecoins?

Transaction Fees by Day

Terra supports swaps between native tokens — LUNA and a number of stablecoins like UST, KRT and MNT. These swaps, rather than happening in an AMM style DEX application, occur as part of the native protocol. The fees generated help to keep the stablecoins pegged to the underlying fiat currency. The graph below shows the total fees in USD generated by swaps on Terra over the last 30 days.

One Huge Day

Note that on one day (June 3) there was a massive increase in fees. The fees on this day were more than 10x the days around it. Drilling into this day, we see that the fee increase was generated by 3 transactions from the one account. This account made 3 trades, all bigger than $1m, and generated $900k of fees in the process. The table below shows these 3 trades from the 3rd of June.

Interesting diversion — I noticed in another of my dashboards, Terra Stablecoin Peg Variance, that KWT was 15% above peg on June 3rd. This is probably something to do with the big KRT-LUNA swap below.

Terra Transaction Fees Detail

Transaction Fees by Day — Without the Whale

Looking at the underlying level of fees generated on the network, and excluding the three transactions above, we saw 30–40k of fees up until early June, then the background level dropping back to around 10–15k per day. The graph below shows the fees by day.

Swap Fees by Day without the Whale

Differences Between Stablecoin Swap Combinations

There are over 100 active swap pairs on the native Terra swap interface. Most of the action is concentrated in a small number of these. Only 6 token combinations (counting swaps in both directions) account for over 99.9% of the fees generated over the last 30 days. The swap fees from these combinations are shown in the graph below. Most of the fees (97%) come from just two combinations — LUNA-UST and LUNA-KRT. MNT and SDT are the next most active stablecoins, however the level of fees generated by these are tiny compared to UST and KRT.

Swap Fees last 30 days by Token Combination

Differences without the Whale

Remember our whale from earlier on, who generated $900k of fees in a day? It turns out this has a big impact on the chart above. We re-run this graph excluding the whale’s big three transactions, and see if the comparison between stablecoins changes.

In the chart below, we see that the LUNA-UST combo is even more dominant, accounting for 93% of fees generated by Terra swaps. The one big LUNA-KRT swap from the whale was making this combo look more important than it was. LUNA-KRT now the 4th highest fee generating combo, behind KRT-UST and MNT-UST swaps.

Swap Fees last 30 days by Token Combination — Without the Whale